The Solvency II readiness survey conducted by Ernst&Young had a response rate of 68% among insurance companies in the local market, the majority of them being subsidiaries of larger groups.
40% of the respondents in the Solvency II readiness survey conducted by Ernst&Young have revenues of less than €50 million, 25% have revenues below the €5 million mark, while 15% have revenues between €50 and €200 million.
The Romanian insurers are aware of the upgrades required by the European Union in certain tools and systems in order to perform more sophisticated risk analyses by 2012. The market also recognizes the need for risk identification and quantification.
In Romania, fewer insurance companies are implementing internal risk management models as opposed to the standardized approach in Western European countries. Some 30% insurance companies currently do not have an opinion on the approach to be initially applied to calculate the capital requirements under Solvency II, and the changes in regulatory framework are the principal motivation in updating risk management systems as opposed to shareholder requirements.
Nevertheless, the market remains optimistic in that 72% of insurers are currently implementing or planning to implement risk management systems which are embedded in the day to day operations of the company.
The new solvency regime will have a significant impact upon insurance undertakings' corporate governance, the way in which these are managing the risks as well as IT systems and data available.
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