News
Insurers vague about cost of Solvency II
14 July 2009
More than half (61 per cent) of UK insurers believe that the cost of implementing Solvency II will be less than £500,000, with a further eight per cent still having no idea of the cost, according to a new survey undertaken by BDO Stoy Hayward.
Of the remainder, eight per cent felt the cost of implementation would be between £500,000 - £750,000, four per cent between £750,000 - £1 million and 19 per cent thought the cost would be in excess of £1 million.
Kirstie Gordon, insurance specialist within BDO Stoy Hayward’s Financial Services Group, says: ‘What is interesting about these results is that the estimated cost of implementation does not seem to correspond with the size of a firm, which would appear odd.
‘This would imply that many firms have only made basic estimates of cost. While the implementation date of October 2012 might seem a long way away, it is essential that planning, especially in terms of GAP and cost-benefit analysis starts now,’ continues Gordon.
The survey also reveals that firms are allocating responsibility for implementation to a variety of different department heads. Nearly a third of insurance companies (32 per cent) believe that the finance director should be responsible, less than one fifth (19 per cent) believe it should be the risk director and 17 per cent believe it is up to the actuarial department.
Says Gordon: ‘The FSA and CEIOPS have clearly pointed to the risk management function as the department responsible for day to day compliance with Solvency II, although the ultimate responsibility rests firmly with the board of directors. Firms need to be aware of this and organise themselves accordingly.’
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