Solvency II represents a fundamental review of the supervisory regime for insurance and reinsurance undertakings in the European Economic Area. As part of this project, European insurers and reinsurers were invited to participate in five quantitative impact studies (QIS) in order to test the practicability of the new approach and to determine the financial impact of the planned changes in capital adequacy requirements. The results of the last of these studies, QIS5, were published in 2011.
This paper describes, for insurance and reinsurance undertakings in the European Economic Area and, more specifically, in Austria and Germany, the difficulties faced under the QIS5 approach, the financial impact of the new regulations on the solvency balance sheet and the most significant contributors in the calculation of the new capital requirements.