At the second annual RiskMinds Insurance conference, Milliman conducted a brief insurance industry survey. More than 50% of delegates participated in the survey and the results were telecast live at the conference venue.
Survey results provided several insights, including the following:
- With Solvency II being delayed until 2016, 57% of those polled did not approve the delay of Solvency II, compared with 43% who did. Although the delay of Solvency II was expected and in some cases seen as a useful respite, the uncertainty around the actual implementation date and the costs incurred by insurers trying to meet deadlines are considered as a major burden.
- The delay of Solvency II has major implications on the way insurance companies need to prepare for implementation. For the great majority of participants (59%), the development of ORSA remains the highest priority, followed by governance issues (26%) and periodical regular Pillar 1 calculations (15%). A small percentage (3%) quoted Pillar III reporting requirements as their major priority.
- Despite the delay, 41% of respondents said that they do Solvency II calculations on a quarterly basis, compared with 22% on an annual basis and 13% who said that they did not yet have a formal process.
- ERM: A large majority of respondents (45%) quoted developing a risk culture as the most challenging aspect of enterprise risk management (ERM). This reflects a sentiment in the the insurance industry, which is still struggling with the most appropriate approach to risk. Other challenges were operational risk (20%), closely followed by defining risk appetite (19%) and emerging and new risks (10%).