Living with Solvency II: An economic capital perspective from recent history

There is little doubt that Solvency II will have a significant impact on many aspects of how insurance companies operate in the future. Much has been written already about this and it remains fertile ground for discussion as debate continues over many details of the regulation.

This report brings some of the implications of Solvency II alive by:

• Creating a simplified but realistic UK 'Model Life Company' (MLC)
• Imagining a world where Solvency II had been implemented before the global financial crisis (GFC)

This report combines modelling techniques refined in industries outside the financial sector with significant advances in computing technology to gain insights that would previously have been out of reach. This report offers an illustration of how advanced modelling approaches can expand the body of actionable information to support management decision-making.