Solvency II is the most significant regulatory change the European insurance industry has ever witnessed and firms have plenty of work to from now on, a general insurance conference heard. Sanjiva Perera, UK Solvency II lead at Accenture, told the Future of General Insurance conference, organised by the Institute of Economic Affairs, that the directive would bring a significant and fundamental change to the industry and would be pervasive through all parts of the business.
Perera warned the insurance industry that it could not be complacent; last year it lost 20 per cent of its capital due to write-offs. Seven of the 10 biggest hurricanes in the last decade had occurred in the past five years and capital was scarce, which meant the cost of capital was rising. The industry needed to generate adequate risk-adjusted returns because "investors have the pick of where to go", he said. Solvency II gave insurers a framework within which to operate. It formalised and connected the process of
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