View more on these topics

&#39UK ready to meet EU insurance standards&#39

UK insurance companies will have a significant advantage over their European rivals when it comes to implementing new EU-wide reporting standards, according to a report published by analyst Fitch this week.

The principal advantages of the forthcoming International Financial Reporting Standards, which aim to provide an EU-wide set of standards for insurance companies, include transparency, consistency and improved management, according to Fitch.

But it predicts that the UK will face no serious struggles in implementing the standards, both because of reforms instituted as a result of previous EU directives and due to regulatory reform by the FSA.

The changes will be introduced in two phases, with the first taking effect in 2005, largely laying the ground for more substantial changes under phase two in 2007 or 2008.

Eventually, insurers will be forced to more completely measure assets against future liabilities on their balance sheets, something the UK life sector is already being compelled to do through the FSA&#39s reforms to the industry.

The ABI agrees with the assessment by Fitch. It says while the immediate effect on the UK remains unclear, the sector should implement the standards without too much difficulty.

Fitch analyst and author of the report Andrew Murray says the ratings agency does not anticipate any changes to insurance companies&#39 ratings although it will maintain a watching brief as the new standards have an impact on balance sheets.

ABI manager of financial reporting Deryck Wright says: “We in the UK think the fair-value methodology is superior and the most appropriate. We want to get on with phase two and on the grounds of practicality require the endorsement of phase one as soon as possible.”

Murray says: “In terms of ratings, we envisage no changes as a result of the IFRS. We will find out more as the companies try to educate the market in the next 12-24 months.”

Recommended

&#39Demand for long fixes rising&#39

Consumer interest in long-term fixed-rate mortgages is on the rise, according to Cheshire Building Society. CBS marketing director Jason Gaunt, speaking at the Marketing Week Mortgage Lending Strategy Summit in London last week, said there is a clear increase in demand from borrowers for loans fixed over a long period. According to a survey in […]

Product matters

You may groan at the thought of another New Star fund and wonder how this one can differentiate itself from some of the other funds in the stable. Well, for a start, its UK special situations offering is a tiny fund at only £2.5m and it is not being run by a fund manager you […]

House prices rise by 2.1%

House prices rose by 2.1 per cent in April, taking the average price of a home to £145,918, according to the Nationwide monthly house price index. The annual increase now stands at 18.9 per cent and prices are rising at more than £100 a day. However, group economist Alex Bannister warned that the pace of […]

FSA receives 5,580 registrations for authorisation

The FSA has today revealed that by the end of April, it had received 15,046 registrations to obtain an application pack and 5,580 applications for authorisation. 8,675 registrations were from insurance businesses and 6,371 for mortgages. Out of those that have already applied for authorisation, 3,684 were mortgage firms and 1,896 were general insurance firms. […]

Finding value in UK equities

By Mark Martin, Investment Director & Head of UK Equities Register for a live update on 9 July at 14.30 with Mark Martin, who will be discussing Chancellor George Osborne’s ‘emergency’ summer budget, the UK equity landscape post May’s General Election and his outlook for the second half of 2015. Mark will also highlight the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment