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“Insurers will buy reinsurance coverage based on Solvency II, but that will mean less business in some areas and more in others”, Frank Reichelt, head of the Zurich-based reinsurer’s German and Nordics business, said. “So all in all I expect the effect to be neutral.”
The introduction of the European Union’s new rules for insurers and reinsurers, dubbed Solvency II, has seen a number of postponements and may be further delayed until 2016 as it still needs approval from the European Parliament. The rules are being developed by the Frankfurt-based European Insurance and Occupational Pensions Authority, or EIOPA, and national regulators.
Munich Re, the world’s biggest reinsurer, has said it expects “that demand for reinsurance will continue to rise as a consequence of the financial crisis and the introduction of Solvency II". Reinsurers help primary insurers shoulder risks for clients. Buying reinsurance can help insurers reduce capital requirements under the new solvency rules.
“Our customers are still waiting for the final specifications on Solvency II”, Reichelt said. “While it’s good to use some more time for some necessary adjustments, I fear a further postponement will hurt the reputation of our industry as we all need clear rules.”