The attitude among insurance companies toward implementing the Solvency II directive has become more negative over the past few years, suggests a recent survey from advisory firm Grant Thornton UK.
Only 24% of participants said they believe Solvency II is the most appropriate way to run their business, suggests the survey, which was completed in September and October of this year.
Another 27% said Solvency II was a “necessary evil.”
The survey included senior executives in the non-life insurance sector from the United Kingdom, Ireland, Continental Europe and Bermuda.
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Since Grant Thornton’s last survey on the matter in 2009, there has been a major increase in the negative attitude of respondents toward Solvency II, the report states.
In 2009, more than half of respondents had said they believed Solvency II was the most appropriate way to run their business.
About a fifth (21%) of respondents now say the regime is a “box ticking exercise,” compared with only 4% in 2009. This year, 28% said they believe Solvency II is “more red tape from Brussels,” compared with only 7% in 2009.
A major reason for the increased negative attitude is the complexity of implementing the directive, the report notes, with 89% saying they believe that “as currently envisaged, Solvency II is too complicated.”
“The implementation process, the constant delays, the complexity of the regime and the quantity of man hours that have been expended preparing for Solvency II have all resulted in a loss of the market’s hearts and minds,” the report says.
A majority (74%) of respondents also said they believe Solvency II is using up resources that would be better deployed elsewhere.
While the majority of those surveyed said they will be ready (if necessary) by Jan. 1, 2014, only 37% said they believe that 70% or more of the insurance market will also be ready by that time.