QIS5: Process, timeline and main results Press Briefing Frankfurt, 22 March 2011

2 Objectives of QIS5 Commission’s Call for Advice (July 2010): oQuantitative impact oCheck principles and calibration targets oEncourage (re)insurers and supervisors to prepare for the introduction of Solvency II oTo provide a starting point for an ongoing dialogue between supervisors and (re)insurers Also: EIOPA to test feasibility and assess complexity

3 QIS5 process Ownership of technical specifications: European Commission “Double” calculations (no default approach set by the EC) oCalculation with and without transitional provisions for discounting oInternal Models and Standard Formula calculation oModular approach and equivalent scenario for the adjustment for the loss-absorbing capacity of technical provisions and deferred taxes oGroups: accounting consolidation as well as aggregation and deduction method “Alternative” approaches: QIS5 to collect information to assess the impact of the issues and/or enable comparisons on potential alternatives (default defined by EC) oValue of participations based on SCR of the undertaking in which the participation is held oIntroduction of the illiquidity premium in risk free rate oRisk margin -with diversification between lines of business (solo) -without diversification between entities at group level oTransitional provisions for own funds oTiering of expected profits in future premiums EIOPA and Commission verifying national guidance

22 November QIS 5 timeline Jan. 2010Mar Apr Jul Aug Nov Jan Draft technical specifications Running of the exercise European Report Consultation technical specifications National analysis / quality check

220 Q&A 5 QIS 5 was a field test! “On the one hand, the quantitative results of QIS5 allow identifying major trends and drawing conclusions about the “big picture”. On the other hand, supervisors consider that the detail of the quantitative results should be treated with caution.”

6 Participation solo Participation rate SoloTarget (set by EC)Results QIS4QIS5QIS4QIS5 25%60%33%68% More than doubled solo participation 1511 Small 791 Medium 217 Big 382 Health 454 Mutual 610 Life 1284 Non-Life 111 Reinsurers 175 Captives 336 Composites

22 November Surplus evolution

Explanation of solo surplus evolution

22 November Groups: QIS4: 106 QIS5: 167 Increase in number of small and medium groups EEA groups without non-EEA entities EEA groups with non- EEA entities EEA subgroup(s) of non-EEA groups Number LargeMediumSmall Number Participation groups

Group surplus (Billions euro) Surplus Solvency ISurplus QIS5Size sample Results in case internal models were approved and/or local rules under D&A for third countries were used Large Medium Small All Consolidated method with standard formula Large Medium Small All

11 Conclusions Industry remains overall well capitalised Need to reduce complexity Further work needed to improve calibration (e.g. in non life underwriting or catastrophe risks) 3 areas identified where transitionals will make full sense: equivalence, hybrids and technical provisions EIOPA to undertake development of Technical Standards and Guidelines to ensure a consistent implementation and enhance practicability and feasibility

Thank you For questions, please contact Sybille Reitz, EIOPA Press Office Perrine Kaltwasser, EIOPA, QIS5 TF leader