Allianz healthcare boss questions benefits of Solvency II

The complexity and cost of implementing Solvency II versus the benefit they offer to the end consumer have been called into question by a top insurance boss.

Allianz Worldwide Care’s chief executive Ron Buchan, who was speaking at the launch of his company’s new Signature healthcare plan in the UK today, said that regulation was the single biggest issues facing insurers.

Solvency II, which determines that insurers match the capital they hold with the risks they cover, comes into implementation in January 2014.

“Whilst in theory it is a good idea, there are, in my view, questions over how complicated it is and therefore how easy it would be for insurers to comply with those rules and how expensive they would be,” said Buchan.

“And, whether at the end of the day, the extreme complexity and costs involved in that is going to have on the commensurate benefit to the ultimate end consumer.”

Buchan argued that it wasn’t the insurers that caused the financial crisis of 2008/09 and they needed to be regulated accordingly.

“It needs to be clearly regulated, but it should be more towards limiting what insurers do rather than this extraordinarily complicated and time and money consuming set of regulations that I don’t think at the end of the day are going to give a benefit that in any way is commensurate,” he said.

As a health insurer, Buchan said he had seen an increase in regulation of policies and benefits that could be sold and terms and conditions by authorities in different countries, particularly in places like the Middle East.

“It’s making the business model for international insurers significantly more complex and if more and more high end locals insured around the world will want policies best issued by international insurers we will have to comply more and more with these regulations,” he said.

Signature, which Allianz claims to be one of the most comprehensive and transparent private medical insurance plans on the market, provides for treatment to be undertaken inside or outside the UK, in line with a trend for greater global mobility.

The product, which is available in signature Prime and Signature Plus, has been designed for the UK-based employees of small, medium and large corporate clients, predominantly those in senior management roles.

It offers a high level of cover for cancer treatment, chronic conditions, routine maternity and health checks, and dental and optical treatment.

The product will be distributed through brokers.

Allianz Worldwide Care’s director of sales Claude Daboul said: “We looked at existing plans and more importantly, we looked at the gaps in those plans and compared them to the needs of our clients.

“There are numerous health insurance plans available, however our findings demonstrated a distinct need for a more transparent and comprehensive product which also supports the geographically mobile nature of our insured members.

“Health insurance in the UK has become very commoditised, so we took a bold approach in developing something new and somewhat revolutionary for the premium end of the market.”