Insurers are expected to abandon entire books of business in an attempt to contain the costs of Solvency II requirements, according to law firm Reynolds Porter Chamberlain (RPC).
Patrick Devine, a partner at RPC, said there was likely to be "a lot of portfolio transfers" in the next three to four years as a result of the European Commission's framework.
"There are always winners and losers in this world and there are those who just cannot raise capital, such as the mutuals," Devine said.
But he warned: "The difficulty is that people do not know what their allocations will be or what the requirements will be.
"We are waiting to see how [the Commission] is going to weight them, but they may not get around to doing that for another two or three years."
' Meanwhile, an Ernst & Young survey has revealed that 80% of major European insurance firms have begun implementation programmes to meet Solvency II requirements.
However, the survey found that insurers still faced a host of challenges to develop internal models, improve information systems and enhance skill levels