Likely to Spur More Use of Ceded Reinsurance in Europe and US
US insurance executives need to know about Solvency II, an influential recent European Union insurance regulation, says Grégory Moliner, CEO of Effisoft USA, a leading provider of reinsurance management software.
“They may not need to grasp it in great detail but should be familiar with its broad outlines because it will have a lot of impact internationally,” he says.
Solvency II, which became effective in January, will make reinsurance more attractive, Moliner says. Under Solvency I, insurers could use reinsurance to reduce their regulatory capital requirements—but on only up to 50 percent of their premiums. And this was only for an insurer’s non-life proportional treaties. Solvency II eliminated those restrictions.
While American insurers with European subsidiaries are most affected, there’s a substantial indirect effect on US insurers. “Although Solvency II is a European regulation, it’s built on principles that are applied in many other countries, including the United States,” he says.
Effisoft USA’s parent, Paris-based Effisoft, is helping its European insurance and reinsurance clients deal with Solvency II. The regulation requires insurers to better understand, monitor, and manage their insurance risks. Cedents are required to exercise better control over their operational risks and to implement risk internal models, he says.
“Under Solvency II, reinsurance may also play a key role in the implementation of Own Risk and Solvency Assessment (ORSA),” Moliner says.
Solvency II video released
Effisoft recently released a brief video in which top international insurance regulation experts talk about the impact of Solvency II. The video, in French, with English subtitles, can be viewed at http://www.effisoft.com/en/2016/solvency-2-video.
Effisoft USA (www.effisoftusa.com), based in Miami, is the North American division of Effisoft. US users of its industry-leading WebXL ceded reinsurance software include State Auto Insurance Companies, The Motorists Insurance Group and Aon Inpoint.
Based in Paris, Effisoft was founded in 1989 as an independent, expanding, proactive company that respects its commitments towards its clients. It is dedicated to improving its products and services to provide impeccable support to an increasingly diversified and demanding market. The worldwide company has more than 300 clients in five continents and 18 countries.
For more information about Effisoft USA and WebXL, call 786-448–5695 or write contact@effisoft-group.com.
