31/10/2013
A summary of the Solvency II Conference
[Check Against Delivery]
Today has been billed as the ‘last huddle’ before the Solvency II rules are finalised.
And to be clear, I am confident that this will not be the last Solvency II conference!
Solvency II has today been described as a Hollywood sequel, ‘the Godfather II of regulation’, to borrow from Sajid Javid.
But back to the conference…
We heard from Andy Briggs, CEO of a life insurer, on the changes that are happening in the UK life market – automatic enrolment, the increasing burden on the UK welfare state and what that might mean for protection products, and how the retirement income market is set to grow as baby boomers retire.
He highlighted the importance of getting Solvency II right in order for this industry to support these important developments – a Solvency II regime that puts customers first – as he rightly said.
Now today has highlighted that opinion is split on what the final date in the timetable will be (some of these opinions being notably strong), but of course the negotiations are still going on!
However there is general consensus that the principles...or ‘original vows’ of Solvency II are right. And we want the right outcomes to follow.
It was good to hear the new Financial Secretary to the Treasury, Sajid Javid express his willingness to step in on behalf of the UK, its insurers and their customers to ensure that this industry gets the right kind of regulation, and indeed, to hear him talk of his and the Government’s pride in this industry.
And we should hold onto that, we have weathered the economic storm well, as many people today have pointed out, and we have a great role to continue playing.
So from the matching adjustment, volatility adjustment, equivalence and transitionals – the technical decisions being made in discussions over in Europe will be very important.
As will other regulatory developments that we know are gathering pace, such as ComFrame and global backstop capital requirements.
And as we continue to get clarity of the final package of measures for Solvency II, we must, as insurers always do, look to the opportunities that we can harness from the new regime, as Raj Singh point out. The doors that may be opening and not just those being shut.
And while the ‘delicate compromises’ continue to be made, I am confident that this industry will continue to find the solutions people need for their changing world and make its unique contribution to individuals, businesses and the economies of Europe.
Thank you.