Regulation – getting the balance right

Delving into the impact of regulation on the insurance sector, the publication writes that regulation can only be sensible provided it protects both consumer and the industry itself. It points out that only the latter's survival can guarantee that losses are indemnified and that annuities continue to be paid. Regulatory frameworks and increasingly holistic views of risks and their interdependencies ultimately benefit both parties.

Using the Solvency II regulation in Europe as an example, sigma observes that although there were worries that European companies would be less competitive overseas as a result and that smaller mutuals would be put at a disadvantage by such comprehensive regulation, the overall impact will be beneficial, "leading to a more transparent, professional and thus more secure insurance market."