European insurers should stop complaining about a looming regulatory shake-up of the sector because they have had plenty of time to prepare for it. Philip Broadley said he "can't understand" why insurers continue to warn about the impact of Solvency II, due to take effect at the start of 2014.
[Mr Broadley of London-listed Old Mutual said:] “Many of the issues that are being spoken about at the moment have been known for five years or more. They’ve had time enough to make it not a big issue.”
But the industry has long complained about the impact of the regime, under which insurers face more rigorous data management, corporate governance and regulatory reporting rules, as well as potentially more onerous capital requirements.
Earlier this year Brussels policy-makers agreed to back various changes to Solvency II that helped allay the industry’s worst fears about the rules. But industry executives still complain about them. Insurance Europe, the trade body, has said the measures still include “inappropriate restrictions” that would prevent them from “working as intended”.
One of the most vocal critics has been Prudential, the UK’s biggest insurer by market capitalisation, which has threatened to move its headquarters overseas because of how its US arm will be treated by Solvency II. “I’m more optimistic than I was, but that’s not saying much”, said Tidjane Thiam, chief executive, last week.
But Mr Broadley said: “No company can say it’s bigger than the European regulator. Businesses have to organise themselves ... with the drift and intent of regulatory progress.” He added: “The one thing that has surprised me is that few disposals in the US have yet taken place. I still think it’s a possibility.”
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