Solvency II reform poses 20% risk of life insurance sector 'failure'

BoE governor Andrew Bailey sounds warning on life sector

John Brazier
clock • 2 min read

The Bank of England (BoE) has issued a warning that the risk of life insurance business failing under new Solvency II rules would increase by 20% in a given year.

In a letter dated 22 February and addressed to Harriett Baldwin MP, chair of the Treasury Committee, the BoE governor Andrew Bailey outlined the estimated impact on the UK insurance sector of the proposed changes to the Solvency II regime. Focusing on the life insurance sector to represent the risk to the wider insurance market, as "these are the firms most affected by these changes," Bailey outlined that based on BoE estimates there is "a relative increase in the probability of failure of around 20%." Announced by the government in November last year, the proposed reform package inco...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Advisers overlooking younger clients over asset value bias

Advisers overlooking younger clients over asset value bias

'Young people need to have access to trusted advice'

Sahar Nazir
clock 22 March 2024 • 1 min read
Financial advice crucial as near-term challenges remain

Financial advice crucial as near-term challenges remain

'A good IFA has rarely been more valuable'

Ahmed Bawa
clock 22 March 2024 • 4 min read
Feel Good Friday: Influencers back financial charity's campaign

Feel Good Friday: Influencers back financial charity's campaign

Financial influencers to support MyBnk’s Global Money Week campaign

Professional Adviser
clock 22 March 2024 • 1 min read