Solvency II for Insurance Organisations

Solvency II is not just about capital!

Solvency II is a fundamental review of the capital adequacy regime for the European insurance industry. The main aim of the Solvency II initiative is to establish a revised set of EU-wide capital requirements and risk management standards that will replace the current solvency requirements in most European insurance markets and insurance companies.



On a couple of earlier posts, we have outlined at a high level the main implications ofSolvency II. We also blogged about the contract opportunities for project and programme managers to get involved in Solvency II for Insurance and how the opportunities that exist in this field.



Thomas Steffen, Chairman of the Committee of European Insurance and Occupational Pension Supervisors (CEIOPS) has quite rightly pointed out that “Solvency II is not just about capital. It is a change of behaviour” He makes the point that effective risk management and policyholder protection are required to be embedded into the organisation, especially in its operational and decision-making procedures. It is not just about models, pillars and compliance, it goes much deeper

General Insurance companies need to act

Insurance companies and related organisations aiming for the internal model approval through IMAP (internal model approval process) will need to produce high quality internal models and processes, which are used by the organisation, to demonstrate commitment and compliance to the Solvency II standards. If a company’s board and main business teams do not buy into the internal model, it is difficult to see how the regulators will. For Solvency II initiatives to be successful in insurance organisations, it is critical to engage with the main business teams and boards early, to obtain their input, gain their understanding and to build models that work with their business requirements.



To provide the boards senior management of insurance organisations with the ability to qualify the reasonableness of key assumptions used in the model, a comprehensive approach to stress testing is required. This is essential to allow management to take full account of the risk dynamics of scenarios within the model.



A highly structured control framework around inputs, model calculations, and model output validation is required. If implemented successfully, such a framework will result in a model that is not only used throughout the organisation, but more importantly, a model that is trusted and valued by all management teams.

JMR Consulting UK Ltd and Solvency II initiatives

JMR Consulting UK Ltd recognises the importance of collaboration and information sharing to ensure companies meet Solvency II targets. With this in mind we have set up a partnership with other Solvency II practitioners called Gain-Line that offers the support you need to implement the changes demanded by the Solvency II directive.

How JMR Consulting UK Ltd can help

To find out more about how JMR Consulting UK Ltd and Gain-Line partnership working together can provide a safe pair of hands for your Solvency II programme, please get in touch by using the contact form, sending an email to info@jmruk.com or calling us on 0845 052 0900.

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