Munich Re claims it is prepared for Solvency II
Munich Re has stated it is well prepared for the European regulatory regime under Solvency II.
The firm said that although the new Solvency II regulatory regime is presenting the insurance industry with major challenges. Munich Re began at an early stage to lay internal foundations for applying the new standards, and has already been incorporating risk-based corporate management for a long time.
It also said that it thinks Solvency II presents new business potential.
Munich Re’s economic solvency ratio, calculated on the basis of the Solvency II standards was 277 percent as of 31 December 2014, and around 260 percent as at 30 September 2015.
Jörg Schneider, chief financial officer, Munich Re, said these solvency ratios reflect Munich Re’s capital strength.
“By comparison with the solvency ratio as calculated under the old method (this was 242 percent as at 31 December 2014), there has been a slight improvement under the method of calculation specified by the new regulatory requirements,” he said.
“This underlines the comprehensive and risk-commensurate calibration of the internal model already used by Munich Re. Even after Solvency II comes into force, Munich Re will retain a great level of flexibility for capital management.”
Munich Re has been drawing up and developing its own full internal model for around ten years. This model has already been approved by the Federal Financial Supervisory Authority (BaFin): from 2016, the regulatory solvency capital requirements for the consolidated group and select solo undertakings will be calculated on this basis.
