Solvency II: Insurance Europe calls for smarter capital rules to boost EU investment and growth

Insurance Europe—the federation representing the European insurance and reinsurance industry—has welcomed the European Commission’s launch of its consultation on the Level 2 technical details of the Solvency II review.

This consultation provides a vital opportunity to address overly cautious assumptions and unnecessary volatility in the current framework, which limit insurers’ ability to invest more in Europe’s long-term priorities.

Updating Solvency II could free up billions in capital, enabling insurers to play a larger role in supporting the EU’s objectives around infrastructure development, green and digital transitions, and economic stability.

As long-term investors, insurers are well suited to contribute to Europe’s competitiveness and strategic resilience—but this depends on striking the right balance in the final rules.

Angus Scorgie, Head of prudential regulation & international affairs at Insurance Europe, added, “The Solvency II review is a test of the EU’s growth and competitiveness ambitions. European insurers want to contribute to achieving them, but compared to countries such as the US and Japan, they are required to hold significantly higher capital buffers.

“Solvency II calibrated adequately could unleash billions more into Europe’s economy and maintain very high levels of policyholder protection.”

Insurance Europe also stressed the importance of fully implementing the political agreement reached last year between the European Parliament and Council. Beyond capital reforms, that agreement included commitments to reduce administrative complexity and ease reporting requirements for all insurers—large and small.

On behalf of the industry, Insurance Europe will submit a comprehensive response to the consultation.

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