And 62% felt the preparations are distracting management from running their business
Only 6% of insurance industry executives believe the costs of Solvency II are ‘reasonable’, according to a new survey by financial adviser Grant Thornton.
The firm interviewed 77 senior executives in the UK’s non-life, life and health insurance markets over two months and found that 76% of respondents consider the costs of Solvency II to be disproportionate, while 65% believe the value added by Solvency II will not justify the expense incurred.
The survey also found that 62% of respondents felt that the preparations were distracting senior management from running their businesses.
Grant Thornton head of actuarial and risk Simon Sheaf said: “Increasingly, the sector is begrudgingly accepting Solvency II as a ‘necessary evil’, and recognising that it will bring some benefits. It is clear, however, that they do not believe that those benefits will be significant enough to justify the costs. The volume of work and resources that have gone into preparations for Solvency II compliance have been astounding and insurers have substantial reservations regarding the impact this has had on their businesses.”
Although 94% agreed with the principles of Solvency II, 74% believe those principles have been ruined by the implementation.
Most participants surveyed were optimistic about the new implementation date, with 76% agreeing that it would ‘go live’ on 1 January 2016, and nearly all respondents (98%) suggesting their organisation would be prepared to do so.