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The implementation of Solvency II in 2012 will set new requirements within the insurance sector around eligible capital and introduce additional types of solvency capital.
Solvency II will undoubtedly have a significant impact on the shape of the global insurance market. Market consolidation and the restructuring of business operating models are widely expected.
Solvency II will require all insurers to develop new and improved modeling capabilities and integrate such models into core business processes. Currently being reviewed by many insurers are a range of legal entity structures and capital options for their underwriting platforms and holding entities.
What will differentiate the winners and the losers in the new regime will be those who can go beyond mere compliance and use this period of significant change to generate greater performance through increased efficiencies.
All of this adds up to a classic recipe for the use of specialist interim managers within the sector. Solvency II will cascade throughout insurance companies and elicit change in systems architecture, financial controls, risk framework development, Target Operating Model reviews and people strategy.
As with any new regulations, candidates with actual hands on experience of delivery are scarce at the moment therefore interim managers with expertise within the insurance sector will be best placed to take advantage of the demand. Individuals who gained expertise delivering Basel II within the banking sector in the recent past could also be well suited to Solvency II projects.
I would be particularly interested to hear from interim managers with the above experience and I hope that my predictions for the insurance sector prove accurate!
Andrew McIntee is a Director and Head of the Financial Services practice of Interim Partners.
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