Although the full implications of Solvency II for captive insurers in the EU are not yet clear, many believe that it could change the landscape of the European captive market. Intelligent Insurer investigates the possible implications of the new regulatory regime.
As they work to satisfy the requirements of the impending Solvency II directives, almost every insurer within the EU will face challenges. Some, however, will be hit harder than others, and captive insurers have been identified as being potentially particularly vulnerable.
“Most captives are facing a more difficult task than the mainstream insurers. This is because they have a concentrated business portfolio and they are smaller companies. This poses two problems,” explains Vasilis Katsipis, general manager, analytics, A.M. Best.
“One is that their capital requirements may be higher than what they are now. The system will move from a very bland one that takes a percentage of your net premiums and reserves to one where you are rewarded for being diversified.
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AM Best, FERMA, Solvency II, Kane, Ganado & Associates, Marsh, ACG