December 28th, 2015

Regulation: A World View

Posted at 1:00 AM ET

Financial market regulation has been under review for a number of years but the global financial crisis in 2008 made it a key priority in many countries. While the previous insurance regulatory framework did remarkably well in the protection of insurance consumers and companies during the financial crisis, the insurance industry has not been immune from these factors. Today, new and upcoming regulations are having a profound impact on companies’ balance sheets and risk management practices. Although primarily aimed at larger, global (re)insurers, the changes will impact medium and small (re)insurers as well.

(Re)insurers are being challenged as the regulatory environment becomes more complex, with regulation increasing considerably at multiple levels in numerous jurisdictions throughout the world. (Re)insurers are facing new costs and pressures in their efforts to manage the regulatory landscape. The most profound changes are occurring on the international front, where new solvency frameworks are evolving at the global level. Regulatory solvency and disclosure requirements still generally fall short of “A”-level risk-adjusted capital standards and rating agency criteria, arguably giving rated carriers some potential advantages over their non-rated peers. However, capital and disclosure requirements are major emerging factors for (re)insurers around the world.

In this report, Regulaton: A World View, we provide an assessment of the development of solvency and other regulatory initiatives, including changes to capital requirements that are impacting (re)insurers. Today most (re)insurers are asking how can they cope with myriad developments in regulatory, legislative and ratings requirements to maximize opportunities and maintain profitable growth.

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