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29th March 2015

NewslinkTrends:Global Insurance Analysis

This week, regulators' 2015/6 financial year loomed and Solvency II outstanding issues were to the fore. The Prudential Regulatory Authority(PRA) published the first set of rules for the new Senior Management regime, and issued a policy statement on its implementation of Solvency II. It also concluded the pre-application process for the Solvency II matching adjustment and provided feedback to assist in formal applications. The Financial Conduct Authority(FCA) set out its Business Plan for 2015/16 and is consulting on fees. It also said it was to ban opt/out selling, and released retirement income remedies which included the future development of a consumer pensions dashboard. The FCA also came under criticism in the last report from the Treasury Select Committee which questioned whether the regulator had learnt lessons from its pre-briefing last year of insurance market reforms relating to closed-book life business. EIOPA continued its rush of releases at the end of the week, inviting feedback on draft Implementing Technical Standards for supervisors, and on a discussion paper relating to infrastructure investment by insurers. It also signed off Co-ordinating Arrangements for all colleges of supervisors with internal models, and published Technical Advice to the EC regarding Regulatory Technical Standards on recovery plans provided by insurers in the event of non-compliance with Solvency II SCR and MCR. Three more US states joined the IAIS MMoU. The UK government is to work with the insurance market on a joint initiative on cyber risk.
Conning looked at the global rise in mergers and acquisitions, whilst ICMIF worldwide research indicated that mutual and cooperative insurers were leading on growth. Swiss Re reviewed insured and economic catastrophe losses in 2014 and issued a report headed "Financial Repression-The Unintended Consequences." Guy Carpenter released a new scenario report on potential tsunami risk from a 9.4 magnitude earthquake in the Manila Trench.
On the IT front, The Competitive & Markets Authority(CMA) indicated provisional approval to Xchanging's acquisition of Agencyport Europe, and CPP Group chose an SSP solution. Several suppliers reported on clients being awarded Model Insurer status by analysts Celent-Citizens(BOLT Solutions), Markerstudy(RDT), and Achmea Australia and Hiscox(both Sapiens). Sequel's Impact risk and aggregation tool also won a European award.
Axis Capital and PartnerRe moved closer to merger, and XL Group issued subordinated notes to raise finance towards the cash element of its planned merger with Catlin Group. Aviva and Friends Life shareholders voted unanimously for their merger and Aviva announced the new life management team. There were also senior management appointments at Liberty Specialty and Flood Re, and the Chartered Insurance Institute(CII) ceo Sandy Scott is to stand down next March. Lloyd's maintained the level of 2013 pre-tax profit last year in a challenging market, and both Ecclesiastical and Talanx produced strong results.
Articles on the above topics are included in those added to the Insurance Newslink and Financial Newslink global database service on Wednesday and today at www.onlystrategic.com