Evaluating Solvency II: Insights into Capital Management and Asset Allocation in the Insurance Industry

The one-year partnership led by researcher Sophie Moinas at the Toulouse School of Economics (TSE),. aims to explore the far-reaching implications of the Solvency II, a major regulation in the sector concerning capital requirements aimed at ensuring the financial sustainability of insurance companies in the event of losses on their investments or insurance activities.

Solvency II mandates that insurance companies use equity capital to finance their activities and various investments, with required levels depending on the risk associated with these activities and investments. In this context, the project will examine the impact of this regulation on the level of equity held by European insurance companies and the composition of their asset portfolios to further estimate the potential impact of Solvency II on the financing of the economy.

By leveraging the expertise of TSE researchers including Sophie Moinas and the renowned Toulouse School of Economics-Partnership Foundation (TSE-P), this partnership combines academic rigor with practical relevance to provide an overview of the impacts of Solvency II and help evaluate its observed effects. The findings will not only contribute to the academic understanding of regulatory impacts but also provide actionable recommendations for insurers, policymakers, and stakeholders navigating the evolving financial landscape.

This partnership aims to foster innovation, resilience, and sustainability in the industry, ensuring a more secure future for all.