Financial services organisations face yet another major challenge in the European Union’s new directive for Insurers. The proposed new EU legislation establishes a new framework to govern the capital requirements of insurance companies, which has far-reaching consequences on how firms are managed. For this reason, the implementation of Solvency II represents a significant demand for knowledgeable professionals on the market.
Taking Action
The financial regulator wrote to insurance firms in August 2009 reminding them of the impact Solvency II will have on their businesses. Although the framework directive will not take effect until October 2012, the financial regulator strenuously recommends firms to commence planning for the implementation process now.
There is no excuse for inaction or delay. Given the enormous range of the Solvency II directive, a 2012 timeline appears extremely short. The implementation of such a change demands active boardroom direction, a full understanding of the implications at all levels of the business, clear allocation of management responsibilities and the earliest possible investment of resources.
Demand Surge
The Solvency II directive will necessitate the establishment of the following functions: risk management, actuarial, internal audit, internal control and compliance. The need for competent and suitably-qualified individuals is heightened by a ‘demand surge’ for knowledgeable professionals as the implementation deadline looms.
Early recruitment activities will not only cut the costs and help alleviate any last-minute panics; they will also allow time to develop a dialogue with supervisors and embed the new risk and capital management framework into the strategic and operational management of the business.
Approach
Adherence to Solvency II regulations will present major challenges and potential opportunities to many insurers and professional service firms.
It is important to constantly keep abreast of developments in legislation, as well as analysing how this will affect human capital management requirements.
All professional recruitment areas will be significantly changed by Solvency II. It is our aim to prepare for how Solvency II will affect recruitment and to supply knowledgeable professionals who can help our clients through this major industry challenge.
Barry Richardson is a Senior Consultant with Marks Sattin in Dublin, specialising within the Insurance Sector. Barry’s client portfolio within Marks Sattin ranges from large multi-national insurance and reinsurance companies to small and medium-sized broking houses.
