€4.9bn regulatory bill hurts Europe’s insurers
Europe’s 40 largest insurers spent €4.9 billion complying with new regulatory requirements in 2013 putting a growing strain on the sector and wiping an average of one percentage point off insurers’ return on equity, according to a report by Deutsche Bank.
What is more, insurers believe these costs will continue at current levels until at least 2015. Figures from Deloitte cited in the report estimate that the total cost of compliance from 2010 to 2012 may be as much as €9 billion, with the average cost for each insurer exceeding €200 million.
Uncertainty has been increased by the delayed implementation of Solvency II, which was originally scheduled to come into force in 2013. It is now unlikely to be implemented before 2016.
Changes in regulatory requirements elsewhere in the world also present challenges for insurers.
The China Insurance Regulatory Commission (CIRC) has altered its rules around investment asset allocation permitting insurance companies in blue-chip stocks in a trial programme.
Meanwhile, in India, the insurance regulator the Insurance Regulatory and Development Authority (IRDA) has unveiled draft guidelines allowing insurers to invest in equity ETFs.
