|Solvency II and RDR -|
"mess with me, you mess
with my whole family"
While there was a couple of faux pas in the document (the official timeline is certainly not "established and managed by EIOPA", and as the world and her husband will tell you, the ORSA is not an annual report!), the document helps understand the concerns and needs of the distribution world at this uncertain time. I picked out the following;
- That CROs will be more concerned about risks posed by external distributors and advisors in future
- That advisers will likewise need assurance on product supplier risks, and that provider and product ratings from external sources "...will be crucial components in gaining this reassurance"
- That the alignment of capital and risk "...will undoubtedly drive capital light products in future"
- That the mainstream press hasn't yet "gone big" on Solvency II, but that advisers may get caught out when they do
- That the advisory industry wants "...a guide [to Solvency II] to explain in an easy-to-understand, jargon-free manner" - over to you FCA!
- There are concerns around the quantum and familiarity of products/providers once Solvency II goes live and we see new market entrants/consolidation
They conclude that "advisers should not panic about Solvency II and its implications". That has a whiff of Chamberlain about it to say the least, but the "panic" would be about convincing punters to pay more for guarantees or share the risks in insurance products in the near future, as opposed to the solvency adequacy of the providers themselves.