According to Towers Watson, with two months of the year already behind us, Lloyd’s syndicates face an intensive period of activity if they are to meet the demanding Solvency II delivery schedule for 2011.
By year-end, each managing agent must confirm that they are sufficiently ready to enable Lloyd’s to submit its Solvency II internal model application in January 2012. But to do so, they must also demonstrate to Lloyd’s – and in many cases the FSA – that the many deadlines from March through to December are consistently being met.
Mike Wilkinson, management consultant at Towers Watson said, “With seven parallel Lloyd’s workstreams, each with overlapping and challenging deadlines, agents will need to ensure resources are highly focused on delivery but at the same time ensure that the complexities of Solvency II are fully understood and integrated into a coherent framework.”
With the added threat of sanctions for not meeting key objectives, many agents’ existing resources will be stretched, in particular those that are already behind Lloyd’s current target positions. As many of the detailed regulatory requirements are still to be finalised, agents will also need to be sufficiently well prepared to be able to respond rapidly to Lloyd’s submission templates as they are published.
Mike Wilkinson said: “In only eight months time, each syndicate will need to submit a full and robust Solvency Capital Requirement (SCR) on a Solvency II basis. But agents will also need to be careful not to shift their focus away entirely from the qualitative aspects as a robust SCR is as much about process, validation and integration into the business as it is the technical calculations. This will be crucial for internal model approval.