Solvency modernisation in APAC

Global trends in solvency modernisation are tending towards comprehensive risk- and economic based regulatory regimes. Swiss Re’s Head of Governmental Affairs & Sustainability, Philippe Brahin, discusses these positive developments in the April edition of Asia Insurance Review, and offers insight into the expected impact of Solvency II in the Asia Pacific region.

The upcoming European Solvency II regime and the existing Swiss Solvency Test in Switzerland exemplify the current trend in solvency regulation towards comprehensive risk- and economic-based regulatory regimes. If calibrated and implemented properly, the EU regime should create an environment in which the insurance industry will be strengthened and will operate more efficiently while performing its fundamental role of shock absorber and long-term investor.

Photo+of+Philippe+BrahinIn this article for Asia Insurance Review, Philippe Brahin points out the reasons why Solvency II is an ambitious step in terms of insurance regulation and will point the way forward for other regulatory regimes around the world to consider.

“Solvency II is the right framework because it combines (i) total balance sheet and economic-based solvency assessment, (ii) strong reliance on qualitative risk governance requirements, and (iii) enhanced market discipline though increased disclosure requirements and transparency,” he says.

However, he also stresses that, for the expected benefits of Solvency II to be realised, regulators must ensure a proper implementation process and the technical requirements must properly reflect the economic reality of insurance products.

Brahin provides an overview of the solvency trends in Asia Pacific and discusses the expected impact of Solvency II in the region. The benefits of reinsurance under Solvency II are also discussed, as it is clear that reinsurance benefits clients, not just from the perspective of exposure and capacity, but also in terms of a company’s overall capital and risk management.

Download full Asia Insurance Review  article (PDF)

Further information

International perspectives on solvency modernisation
The importance of solvency modernisation

Published 2 April 2012

The importance of solvency modernisation

In modernising their solvency regimes, countries and regions are bringing their regulations up-to-date with the significant advances that have been achieved in risk management and group supervision in...

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