Vicky Kubitscheck, chief risk officer and compliance director at Police Mutual
Which element of Solvency II has presented the most difficulty to the industry?
Initially, I thought those were the technical elements, but as Solvency II started to bed down, and firms started to operationalise it, I realised that the most difficult elements started to emerge around the narrative to join up the technical models in terms of the rational for why firms adopted a particular model, and to marry up the narrative on the story board. I thought the difficulties that firms face were communicating the rationale for the models, as a result of the inability to articulate the reasons why the models that were being adopted, truly reflect and were aligned with the business models, the strategy and the risk profile of the organisations.
This can distract firms from the real benefits of Solvency II. I think that the narrative, the story boarding of Solvency II from a regulatory perspective, appears to be emerging as a very challenging element for firms
What is your biggest fear about the new regime?
My biggest fear is the good intentions of Solvency II being overshadowed by compliance. The good outcomes that are intended by Solvency II for developing resilient organisations that deliver good benefits for customers, as well as stakeholders and shareholders, can be undermined by the inability [of firms] to communicate. That itself can cause major distraction from governance and the management of the organisation. I think that would be a shame.
What is your biggest hope for the new regime?
My biggest hope is that we have a supportive regulator, who can have mature dialogue with firms to develop strong organisations that can promote good governance, sound management and take informed risk decisions, to grow and develop businesses.
I believe Solvency II has got really good principles, intentions and objectives. It is how firms and the regulators come together and ensure that those principles are crystallised in firms' strategies that is key.