European insurers spent 9 bln euros on regulation-report
LONDON, Sept 5
LONDON, Sept 5 (Reuters) - Europe's insurers spent up to 9 billion euros ($11.9 billion) between 2010 and 2012 as they struggled to meet standards set in a barrage of regulation introduced since the financial crisis, a report published on Thursday said.
Following the 2008-2009 crisis, regulators around the world rushed to compile rules to head off future upsets, aiming some at the insurance sector where industry leaders such as Allianz SE and Axa SA were deemed of systemic importance.
Underscoring the impact of the clampdown, the report compiled by consultancy Deloitte said the largest insurance companies had each spent more than 200 million euros to meet the new rules, pushing the bill for the top 40 European insurers to nearly 5 billion euros.
New regulations include the so-called FATCA rules obliging institutions to disclose United States citizens who are their clients.
There are also proposed capital requirements known as Solvency II and new accounting rules.
Deloitte - whose findings are based on interviews with top executives at a sample of the top 40 companies in the sector - said the complexity of the situation had made issues relating to regulation central to running companies, adding most top insurance executives expected the elevated cost of compliance to continue at least until 2015.
"The new regulatory agenda presents many more challenges than the simple headline cost. It is leaving insurers stretched, uncertain and requiring new capabilities," said Deloitte, which is interested in the issue because it might give advice to companies on how to meet the new rules.
Insurers have become increasingly frustrated in particular at the complexity and uncertainty surrounding Solvency II, which is being promoted by the European Union.
Negotiations surrounding the new regime have lasted years and many companies have been angered by the mounting costs associated with preparing for a set of rules that are still under development.
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