The Solvency II review has finished – What will change?

The global 2020 Solvency II review has finally reached its conclusion after a political compromise was reached at the end of 2023. We here analyze some major changes, namely the liability discount curve, the required capital for interest rate risk, the treatment of equities, the risk margin and the volatility adjustment, and assess the impact on European insurers.

 

Executive summary

  • The global Solvency II review is now coming to an end

  • We here focus on some core elements of Solvency II which have a direct impact on the valuation of insurance liabilities and the standard required capital calculation

  • Some changes will have a significant impact, especially the changes to the risk margin, volatility adjustment and interest rate stress scenarios

  • After the official legislation has been published, the Member States will have a two year period to implement the legislation in their national frameworks 

  • The full implementation is therefore not expected before 2026-2027

 

Disclosures

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The Solvency II review has finished – What will change?
The Solvency II review has finished – What will change?
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