SOLVENCY II, an EU directive which will introduce economic risk-based solvency requirements across all member states for the first time, will affect the insurance sector in Slovakia next year. Allianz-Slovenská Poisťovňa, the biggest insurer in Slovakia, wrote in its 2009 annual report that the directive will change capital requirements, which might have a significant influence across the whole insurance market. The directive is scheduled to come into effect on December 31, 2012.
In mid July, KPMG released a Solvency II readiness survey for central and eastern Europe (CEE). The results of the survey showed that preparations for the new Solvency II regime are undoubtedly a priority issue for insurers operating in the CEE region. The survey findings demonstrate that only small companies which expect support from their parent companies have relatively undeveloped Solvency II projects. Other companies are making visible progress and are conducting their Solvency II preparations regardless of external pressures. These firms expect to enjoy the benefits that can be achieved from implementing Solvency II, particularly in the management of information for day-to-day and strategic decisions, as well as in relation to capital management.
Jozef Harčár from the KPMG department for actuarial services in the CEE region explains that the whole issue is wide-reaching yet complicated and sees parent-company support behind the fact that some companies are not yet hurrying.
“A typical scenario in companies which have started preparations for Solvency II is that the company is part of a large international group, which has been preparing and coordinating group support for Solvency II,” a KPMG press release quotes Harčár as saying. “Most companies in central and eastern Europe are small – and earlier or later will adopt what the group dictates. So to some extent this is ‘a wait and see approach’. Implementation is probably centred in the country in which their headquarters sit.”
25. Oct 2010 at 0:00 | Compiled by Spectator staff