Lobbying on Solvency II captive concerns tops Swerma agenda

And these were key themes discussed at its annual Risk Forum held in Stockholm last month where Fredrik Finnman, Swerma’s President and Group Risk and Insurance Manager at ASSA ABLOY, gave his take on Solvency II’s likely impact on captives. Although he stressed the capital adequacy regime will bring many positives, he subsequently told Commercial Risk Europe that Swerma will spend part of its time educating Swedish authorities about captives in order to address certain concerns. “There are risk and insurance associations at the European level that are lobbying the EU, but our intention is to make the authorities here understand what a captive is and why the insolvency of a captive cannot affect the man on the street that Solvency II is trying to protect. We will create a wish list with how we want Swedish rules to adapt and reflect captives and present that to the authorities,” said Mr Finnman.hideUntil now Swedish captive owners have been explaining their concerns on an individual basis but Swerma hopes that acting as an association will help reap better rewards. Swerma’s concerns over Solvency II are less to do with the capital requirements of Solvency II and more over reporting requirements. In short they are after simplification. “The solvency requirements are not a big issue,” said Mr Finnman. “However the Pillar II and Pillar III requirements around internal control, governance and reporting requirements are all designed for large multinational insurance companies and not for a captive with limited resources. We need to ensure that the financial authorities locally have some kind of ability to review captives on realistic terms.” As an example, he pointed to the fact that as the rules stand captives will have to complete more than 40 templates for Solvency II when perhaps only 10 are applicable. In his address to fellow Swedish risk managers Mr Finnman also outlined the positive aspects of Solvency II for captive owners and risk managers in general. “Solvency II will hit us so we are also looking at how can we make good out of this, what are the advantages. We see a number of advantages from Solvency II for captive owners in Sweden,” explained Swerma’s president. One is that it will force risk managers to get to know their business and captive better. It will also bring about increased transparency between captives that will help owners to understand how best to operate. Most importantly, all captive owners are insurance buyers so they will become more strategic in the market once Solvency II comes into effect, explained Mr Finnman. This year will also see Swerma attempt to better help risk managers working in the public sector. Until now Swerma has been well represented by members from multinational companies but is generally quite underrepresented in terms of members from the state sector, said Mr Finnman. “We see a lot of individuals from the public sector out there on their own and we believe there is a need for them to share knowledge with peers and for education on the best way to procure insurance and manage risk. When they buy insurance they are left in the hands of the brokers more or less and we would like to increase their skills and knowledge so they can act more objectively and independently,” he told Commercial Risk Europe. A third focus for Swerma is education. It will launch its student network and run a risk management essay competition with a prize ceremony at next year’s forum. “So we are trying to involve the up and coming generation at university but also ensure that those that have already graduated stay in touch with professional development,” said Swerma’s president. The essay competition is aimed at undergraduates and information on how to enter can be found at www.swerma.se.

Lobbying on Solvency II captive concerns tops Swerma agenda

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