Hedge, reinsure or restructure: insurers mull risk-margin fixes

Advisers are pitching ideas to help companies deal with rate-sensitive risk margin

interest-rates-lines

No-one in the UK seems to like the Solvency II risk margin, not even the regulator.

The margin, which requires insurers to hold enough capital to pay a third party to take on their liabilities in insolvency, is highly sensitive to interest rates. From January 1, it will add unwanted volatility to insurers' balance sheets. And with rates so low, it presents enough of a problem to firms for the UK's Prudential Regulation Authority (PRA) to voice concerns about its impact.

Insurers are starting to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: