Solvency II creating boom for risk professionals

Despite this good news story nearly half, 46%, of risk professionals questioned believe that Solvency II will fail to achieve its goals and objectives. Some 44% of the risk professionals surveyed expect risk teams to grow in the next 12 months as a result of the planned capital adequacy-based regime. Some 70% expect bigger pay packets in the next 12 months as a result of the growing demands of Solvency II. Overall, packages are expected to rise between 10% and 25%. Two-thirds of respondents anticipate a surge in the number of risk professionals promoted to executive boards as the function gains visibility.hideWith Solvency II now planned for implementation in early 2013 adapting to the new regulation has become the top priority for insurance firms, said the IRM and Kinsey Allen International in a statement. It is now the most important task for risk professionals, they added. According to their research a senior risk professional now dedicates almost 50% of their working day to Solvency II. In contrast, the same risk professional spent less than 20% of their time on Solvency work just 18 months ago. Currently there is an average of 19 professionals per insurance risk team, with five members specialising in Solvency II. Just four years ago, it was not uncommon for risk teams to total five or less. Loraine Silvester, senior consultant at Kinsey Allen International, commented: “Doubts may still linger as to whether Solvency II will achieve its objectives, but there is no doubt it is changing the landscape within risk. It is something that all insurance firms must comply with, and this is driving a change in recruitment policy and working habits. Risk professionals with Solvency II or financial risk or modelling experience are in hot demand as the big players look to broaden their risk teams to adapt in time for next year’s new regulatory framework.” One reason for the expected increase in pay packets is a lack of suitable candidates qualified to help insurance companies meet Solvency II’s deadline. This is likely to push up salaries and benefits for the right professionals, said Kinsey Allen International. In the past 12 months, 60% of senior risk professionals who took part in the research have witnessed a growth in their remuneration, with pay rises exceeding expectations of 69% of respondents. The research also shows a growing recognition of the risk function at board level. 53% of senior risk professionals now believe that their board has a good understanding of the challenges. Loraine Silvester continued: “With risk’s meteoric rise in prominence insurance, boards are now beginning to recognise the value of highly skilled risk professionals. As a result, top-flight risk experts with excellent communication and technical skills are being offered large increases in salaries and their worth is only going to increase the closer we get to the deadline. As demand for these exceptional individuals rises, insurance companies should take the lead from the banking sector by introducing more strategic retention packages comprising shares, cash and deferred bonuses to ensure they hold on to their top talent.” Steve Fowler, chief executive of the IRM commented: “IRM has seen strong membership growth from the insurance sector in recent years, reflecting the drive to raise professional standards and build risk management knowledge and skills. This valuable research highlights the clear skills gap and IRM is working with the sector to address this with various qualifications and training courses.” A total of 90 risk professionals and risk specialists took part in the online survey conducted by the IRM and Kinsey Allen International.

Solvency II creating boom for risk professionals

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