So read on if you are interested in seeing if 2012, just like the popular 'Lovely Day' singer, was the year that the...errrr....Bill Withers (?)
Legal and General
- "Delivered the core components" of Solvency II, though there remains "much uncertainty" - go figure!
- £50m spent on Sol II and "other strategic projects" (no further split available) - this figure was £56m last year
- Costs of £32m (£30m previous year) for Solvency II
- Expect costs to fall by "around 50%" for the next two years
- "Rephased our implementation project to minimise costs"
- EC calibrated to 1-in-1,250 (S&P 'A' rated)
- In the AR&A, they add that they "...remain at the forefront for internal model approval"
- £76m spent on (predominantly) Solvency II in 2012, as opposed to £56m in 2011 - 2012 was of course the year that they dropped out of IMAP, so the spend dropped in the second half of the year
- Original provision for Sol II released from MCEV this year was £34m!
- Economic Capital coverage of 182%
- £117m spent on Sol II specifically, against £96m last year
- "Well placed" for ICAS+ review
- £112m spent on Sol II, RDR and other restructuring (no further split available) - was down as £59m specifically on Solvency II in 2011
- Economic capital at risk managed to 99.93%, and currently at over 160%
- "Given the delay to the Solvency II go-live date", focusing on embedding ORSA and internal model during 2013
- No coverage of project spend - same as last year
- £48m of Solvency II implementation costs in 2012 (£55m previous year)
- "...expects to engage in the initial stage of the FSA's proposed Individual Capital Adequacy Standards Plus (ICAS+) regime"
- Solvency II "may" provide a more risk-based capital framework, but "...we now know that it will not be implemented before December 31st 2015"
- "Continue to evaluate [their] options, including consideration of the Group's domicile"
- "...remain focused on preparing for implementation" despite uncertainty
And over to continental Europe;
- "...adoption in 2014 is no longer guaranteed"
- EC coverage of 199%, calibrated to 99.5% VaR over 1 year - was previously calibrated to 99.97%, and Solvency II is used as rationalisation for the y-o-y change
- Rated 'strong' by S&P for ERM, and have had their internal model positively rated by them
- "Will take advantage of the delay in the implementation of Solvency II" to industrialise balance sheet production and internal model processes
- "..some uncertainty remains" around Solvency II, and they are banking on "at least two further years" delay
- Note that "...the risk that our Life primary insurers may not meet the capital requirements cannot yet be entirely excluded"
- Confident that "new opportunities...will exceed the challenges"
- Targeting 1.75 x 99.5% VaR over 1 year as their Economic Capital Target - this is a "...conservative approach, offering a high degree of security"
- Currently hold 129% of that figure
- Perhaps more significantly from an internal model perspective, hold 225% of 99.5% VaR over 1 year - if we considered that "conservative", I wonder what we might consider "liberal"?
- Economic capital ratio (calibrated by their internal model to ultimately deliver the required SCR percentile) of 159%, unchanged y-o-y, despite a lot of positive capital management activity (p33)
- Solvency I ratio is 150% (p31), up significantly on last year's 119%