Concerns over the capital strength of the insurance industry have been raised by a poll of European insurers at the Economist conferences last week.
76% of those surveyed said the industry needs "better risk models" to shore up their financial strength. Speaking at the event on the European insurance industry, Richard Bennison, Head of Insurance at KPMG, said insurers should better align their risk models with future solvency requirements.
Bennison said: "With some life offices in potential difficulties over their financial strength positions, the insurance industry urgently needs to advance the sophistication of its risk modelling.
"The insurance industry is behind the banking industry in terms of risk management - ironic as the very business of insurance is risk - and many life offices are starting to pay the price."
"The whole thrust of the new Solvency regime being introduced by the European Commission is to establish a solvency margin requirement that is better matched to the true risks insurers are exposed to."
The survey also predicted mixed fortunes for the insurance future. 57% of executives rated the industry's ability to increase margins in the coming years as weak.
However, executives were optimistic about premium growth. 65% expected premium growth in general insurance to increase and 50% expected premium growth in life assurance to increase.
