Solvency II: An Internal Opportunity to Manage the Performance of Insurance Companies

Since the turn of the millennium, a profound shift in the management of insurance companies has been underway. The main catalysts of this shift are the growing complexity of risks, the sophistication of the means of measuring them, and the demands made by investors for greater transparency and for higher-quality management. In this environment, prudential (Solvency II) and accounting (IFRS) requirements must also adapt to create new frameworks offering a better view of the risks borne by companies. All insurers, regardless of their characteristics (public companies, mutual insurers, provident societies) will be subject to the new prudential rules and will thus have to make heavy investments in the data collection, risk measurement, and simulations required by the supervisor. This study shows how, by having these investments respond to objectives more inherent to the company, these Solvency II constraints can be capitalised on.