Here’s a deceptively simple question. How many firms will fall under the scope of Solvency II?
You could try popping the question into an online search engine. Good luck with that. A selection of search phrases including “the size of the Solvency II market” or “how many Solvency II insurers” will lead to a mishmash of results containing all sorts and an Insurance Europe paper from 2007.
Before you rush off to test this out, here is the result. Well sort of …
Finding that number
According to information collected by Solvency II Wire from National Competent Authorities (NCAs) the number of insurance entities that fall under the scope of Solvency II in the 28 Member States is about 3,600. The results are based on direct responses from 20 NCAs (including Gibraltar), with the rest coming from industry and the EIOPA Register for Insurance Undertakings. The latter puts the number of insurance firms that fall within EIOPA’s area of competence at around 4,200 for the 28 Member States. If you add Liechtenstein, Iceland and Norway the total rises to around 4,320.
Slippery numbers
Establishing the total number of insurance entities in Europe, let alone that of Solvency II firms, is a notoriously slippery business because of the array of legal forms they take (such as joint stock companies, mutuals and cooperatives). The fact that many fall under regional rather than national supervision, and, to a lesser extent, recent consolidation and M&A activity in the sector only complicates matters.
What counts: implementation
We could spend all day counting the numbers, but what really counts is what is happening on the ground. Solvency II Wire first alluded to the shift of focus from Frankfurt and Brussels to local regulators in the spring of 2013, a trend that has continued since and is only likely to intensify as we move into implementation in 2016.
The state of Solvency II implementation
So what is the state of Solvency II implementation? Anecdotal evidence suggests it is patchy. This was becoming apparent from the time the results of the comply or explain exercise of the Solvency II interim measures were made public in early 2014 and continues since in the take up of XBRL, internal model application and transposition, to name a few. As expected, NCAs have been very busy, increasing their output of consultation and advisory notes, while industry continues its preparations. A recent survey from Insurance Europe tells us: “Insurers on track with Solvency II implementation”. Followed by the customary alarmist messages about the number of pages of regulation, reporting and “gold plating”.
The number of Solvency II insurers in europe
So to conclude, there are (delete as appropriate) 4,800/5,300/5,600 insurers in Europe of which 3,600/4,200/4,320 will fall under the scope of Solvency II. —