During Day 2 of Insurance Asset Risk 2020 EMEA conference, delegates heard from the Association of British Insurers director of regulation Hugh Savill that Brexit could be a 'papal schism' for Solvency II.
Solvency II, and in particular the delayed review of the European regulation, featured heavily in the day's debate. Many see Brexit as an opportunity for the UK to take back control on insurance regulation.
Beyond UK and Brexit considerations, while insurers and regulators agreed on principle on the proposed changes to Solvency II, they agreed to disagree on the implementation of those changes.
During the conference, the regulator had the opportunity to defend its position against the industry's softly spoken criticism. In particular, as insurers lamented that the rules around long-term equity were too constraining for them to use, EIOPA's Justin Wray retorted the rule creates a framework for future investments rather than current equity holdings.
Insurers also called on policy makers to create more incentives for them to invest in assets that facilitate a transition to a low carbon economy. Without bigger incentives for the private sector to invest in the transition to a low carbon economy, the EU will fall short of its carbon neutrality goal, according to Lars Haram, chief investment officer and head of asset management at Oslo Pensjonsforsikring.
On the topic of climate change, panellists admitted that the available data didn't help to map their portfolio to a 2-degree pathway scenario. But they urged insurers and stakeholders not to be deterred by this challenge and to join the sustainability journey. This, they said, is no longer about doing the right thing, it is a commercial risk and an investment opportunity.
A round up of Day 1 is available here.
All panels and sessions are available on demand on the events platform for another two months.
Registered delegates can access the replays here. Non-registered delegates can contact events@fieldgibsonmedia.com for access. Re/insurers, regulators and commissions can access for free by emailing events@fieldgibsonmedia.com
