The Solvency II Experts News

Munich Re has successfully concluded this joint project with a number of European insurance companies and presented the concept at market events. In all cases, the partial model has had an impact, the economic risk capital calculated for the underwriting risk in life being lower than if the standard formula had been used.

The timeframe for implementation of Solvency II is still the subject of lively political discussion. But there will be a profound shift in the way insurers evaluate and handle their entire range of risks.

Munich-re initiated a project (Pillarone) in order to develop a free open source software platform focusing on risk management: contracts, portfolios and organisations.  Driven by the new requirements of Solvency II, the PillarOne project tries to address all facets of risks – it strives for providing a sound foundation in enterprise risk management. The basic idea of PillarOne is to integrate current and new actuarial and technical methods into a sophisticated framework.

The Pillarone project has attracted a community from the insurance industry (actuaries, risk managers, consultants) which discusses, compares and benchmarks risk management methods, and collaboratively develops approaches.

Open source software components are freely available for any interested party. The components can be adapted to different software systems. All PillarOne applications can be used in a stand-alone single user mode, as well as in a multi-user client-server mode.

Click here for further information, events, news and downloads.

In this article, Walter Wartenweiler summarises the results of a forthcoming contribution from W. Hürlimann, “Optimization of the non-life risk diversification in Solvency II” which will be presented at the 39th International ASTIN Colloquium, Helsinki in June 2009.

This contribution focuses on the optimisation of the geographical diversification of the premium and reserve risk in non-life insurance. It shows that the QIS4 specification for geographical diversification is not optimal. Click here to read full article

The CEA, the European insurance and reinsurance federation, welcomes the report published today by the European Commission’s High Level Group on Financial Supervision, chaired by Jacques de Larosière.

“We welcome this timely, thorough and far-reaching review of financial services supervision in Europe, particularly against the background of the current economic crisis,” said Tommy Persson, president of the CEA.

“The CEA is delighted with the De Larosière Group’s recommendation that the proposed Solvency II Framework Directive, which will create an appropriate regulatory framework for Europe’s insurers, be adopted,” said Persson. “We also welcome the recommendation that the Directive should include a group support regime and a binding mediation process between insurance supervisors.”

The CEA believes that supervisory cooperation at European level is still incomplete and that the proposed Solvency II Framework Directive – in the original form created by the European Commission – is the appropriate legislative tool to address the shortcomings of the current regulatory framework for insurance.

If Solvency II is adopted without compromising its key principles of harmonised, risk-based regulation, it has the potential to be a global role model. The European Union would be the first region in the world to bring the supervision of insurers into line with their economic reality.

“The CEA also supports the De Larosière Group’s recommendation that a more harmonised and consistent set of supervisory powers should be developed at European level and that the Committee of European Insurance and Occupational Pensions Supervisors (Ceiops) should benefit from a reinforcement of its role and an urgent and significant increase in resources,” said Persson. “The CEA will now analyse in detail the Group’s report, including the more far-reaching proposal of the creation of a European Insurance Authority,” added Persson.