Introduction
The Solvency II Directive, which came into force on 1ᵉʳ January 2016, established a regulatory framework that is crucial for the financial stability of insurers within the European Union. Today, with a few years to go until the review scheduled for 2026, companies in the sector are actively preparing for adjustments that are expected to have a significant impact on their risk management, capital and reporting strategies. This article explores the upcoming changes, the implications for insurers, and the actions required to comply with the revision.
1. What is the Solvency II Directive?
- The Solvency II directive is based on a three-pillar regulatory framework to guarantee the stability of insurance companies:
Quantitative requirements: This component defines the capital required to cover the risks incurred by insurers, based on risk calculation models and solvency margins. - Qualitative requirements: This requires insurers to put in place robust governance systems and effective risk management, including internal management processes to identify, assess and limit risks.
- Transparency and reporting: Insurers must provide detailed information on their financial situation and risk management to regulators and the public alike. This helps maintain policyholder and investor confidence in the sector.
2. What opportunities are there for talent in the financial sector?
This wave of consolidation, driven by the quest for critical mass, is generating an increased demand for specialist profiles to support these new giant structures.
- Cost reduction and operational efficiency: Merged companies are looking to streamline their operations while strengthening their ability to invest in assets requiring considerable resources. This is generating strong demand for profiles in risk management, compliance and investment management.
- Digital transformation and data science: The increasing digitalisation of the sector requires experts in financial technologies and data science to support the automation of processes and the exploitation of data in asset management.
Financial experts capable of adapting to these new dynamics are therefore in greater demand. Our agency, which specialises in recruitment for the banking, insurance and asset management industries, is ideally placed to help companies source the talent they need for this transformation.
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3. Changes planned for 2026: Challenges and adjustments
The Solvency II review, scheduled to come into force in 2026, will bring significant changes in a number of key areas, including capital requirements, reporting obligations and risk management requirements.
1. Reinforcement of capital requirements :
The changes aim to adjust capital requirements, with a reassessment of how risks are measured and hedged. This could lead to adjustments in insurers’ investment strategies, in particular to optimise the management of asset portfolios.
2. More precise and transparent risk management:
The revision of Solvency II will place greater emphasis on improving risk management, with stricter criteria for monitoring and controlling systemic risks. The ACPR recommends that insurers start now to assess the impact of these changes, particularly in terms of stress tests and financial projections.
3. Increased reporting obligations:
The revision may also include new reporting requirements aimed at ensuring greater transparency in risk management and solvency. Insurers will probably have to provide more detailed information on their exposure to market risks, as well as on how they calculate and manage their capital reserves.
4. How are insurers preparing for these new requirements?
To comply with the requirements of the Solvency II review, insurers will have to take a number of steps:
1. Strengthen risk management systems:
The first step in preparing for the 2026 revision is to assess the effectiveness of existing risk management systems. This includes integrating new technologies for risk analysis, implementing improved governance procedures, and adapting risk management models to the reality of today’s market.
2. Adjusting investment strategies:
Insurers will need to adjust their investment strategies to meet the new capital requirements. This could include rebalancing asset portfolios, with particular attention to asset classes considered riskier or less liquid.
3. Improving reporting processes:
A major challenge for insurers will be to improve their reporting capabilities to meet increased transparency requirements. This will require investment in tools and IT systems to generate detailed, reliable reports that comply with the new regulations.
My conclusion and analysis
The revision of the Solvency II Directive in 2026 represents a major challenge for European insurers, but also an opportunity to improve their risk management, governance and transparency. By anticipating these changes now, companies in the sector will not only be able to comply with the new requirements, but also strengthen the confidence of policyholders and regulators in their financial solidity.
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Auteur : Emerique Opou
Founder and CEO of Emérique & Partners
London, United Kingdom
Named to Staffing Industry Analysts‘ Global Power 150 Women in Staffing list in 2022, Emérique has over 15 years’ expertise in recruiting niche profiles in banking and insurance.
Its rich pan-European experience has enabled it to build a solid network of professionals in the banking and insurance sectors, including actuaries, quantitative finance experts, risk managers and audit and compliance experts.
In 2024, Emérique & Partners was a finalist in the Recruitment industry, entrepreneur of the year category at the Recruiter Awards in London.
In 2024, she was also a finalist in the SME national business awards in the ‘business woman of the year’ category in the United Kingdom. Every quarter, Emérique analyses the major trends in the French and European banking and insurance markets.
His rich pan-European experience has enabled him to build a solid network of professionals in the banking and insurance sectors, notably with actuaries, quantitative finance experts, risk managers, and compliance experts.
Emérique & Partners recruits exclusively at executive and senior management levels.
Every month, Emerique deciphers the major trends in the French and European banking and insurance market.
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