RiskTech Forum

SecondFloor: Is This A French QIS? French Get Chance To Learn From Others’ Mistakes With L’exercice 2013 De Preparation A Solvabilite II

Posted: 30 May 2013  |  Source: SecondFloor

L’exercice 2013 de preparation a Solvabilite II, something close to a French Solvency II dry run scheduled for September 2013, gives French insurers the chance to immediately take advantage of the lessons learned by other European insurers that raced to be ahead of the Solvency II curve. Many of the mid-size and small French mutual insurers (les mutuelles) held back from initiating projects and they can now draw on the best practices that have come out of early adopter projects across Europe from the likes of Allianz, Prudential, Legal & General, ING, Aviva and Nordea. Such insurers have come to understand the scope and structure required for a successful Solvency II programme. They have pioneered the practical approaches to calculating economic and solvency capital, coordinating the data, models, calculations and analysis involved,  and bringing all this together within a strict reporting time window. Many have struggled to achieve this, but their lessons have been learned and are available now for the benefit of French insurers.

For the 2013 preparation exercise most insurers will be looking at a challenge similar to generating a Standard Formula report and will need to gather the right data, run the calculations and complete the template for submission to the Autorite de Controle Prudentiel, the French regulator sitting in the Banque de France (www.acp.banque-france.fr/exercice-2013-preparation-solvabilite-2.html).

At this stage most firms won’t be looking for portfolio replication, curve fitting or other sophisticated capital calculation methods, but many will be looking to leverage the time and effort they spend on l’exercice to lay the foundation for their future Solvency II regime. The priority capabilities required and methods to address the complexities involved in instigating them, will enable confidence  among those responsible for delivering a complete, accurate Preparation a Solvabilite II submission on time. So for those who have thus far abstained from the pleasures of Solvency II, the French QIS could be an exciting experience.