QIS5 unlikely to affect ratings - Fitch

Fitch has said that the specification for the latest Solvency II test run is unlikely to affect its rating of insurance companies.

The rating agency has said that the quantitative impact study (QIS)5 final specification does not materially alter Fitch’s view on the impact of Solvency II on ratings.

Fitch notes that there have been a number of changes to the specifications since the draft QIS5 specification was published in April 2010.

It says that changes to own funds and credit for liquidity premium are likely to increase available capital for insurers.

It also says a number of calibrations have been reduced, resulting in slightly less onerous capital requirements for the insurers affected.

However, at a group level, the calculation of the risk margin has been changed to exclude diversification benefit between entities, which will reduce available capital at the group level.

The agency identifies key areas in which the calibration of the quantitative calculations is not certain and which could have a large impact on the final results under the final Level 2 implementation guidelines.