The implementation of Solvency II will place restrictions on the investment strategies of many insurers
It will require insurers to understand their liabilities better, to take more focussed investment risks and to hold additional capital against any mismatch with their liabilities’ duration. BNY Mellon’s Insurance team speaks about the investment options open to insurers facing tighter capital regulation. Charles Pears at Insight Investment, a subsidiary of BNY Mellon, explains, “Insurers with enough capital could overlay their asset allocation with derivatives, to deliver a sensible transition and minimise the current costs of buying and selling in illiquid markets.” Many firms haven’t yet considered the substantial amount of data changes and transparency requirements that Solvency II will generate. BNY Mellon can help with these challenges and deliver the required information based on individual client needs.