With only a few weeks left before Solvency II rules kick in on Jan. 1, most insurers are at least somewhat ready for the new minimum capital requirements, according to a new survey of executives from the sector. But the new requirements for doing business in the European Union are causing plenty of anxiety.

At the same time, half of executives surveyed by Natixis Global Asset Management said they see the evolving and pending regulatory environment as a top threat to their industry. Also, 64 percent said that meeting Solvency II requirements is among the most difficult challenges they face, due to costs, data management and how it affects investment management strategy.

Solvency II rules, years in the making, will outline in the European Union how much capital insurers must set aside for operational risk, investment and underwriting. Insurers have been mixed about the new, tougher requirement.

The Natixis survey of 200 insurance executives in the property/casualty, medical, reinsurance, life and pension sectors found that a solid majority were either very well prepared or moderately prepared in areas including the U.S., U.K. and Ireland, France, Germany and the Nordics.

There are variations of readiness, however.

Here’s a breakdown of executive responses by region/country:

• In the U.S., 28 percent are very well prepared, and 55 percent responded they are moderately prepared.
• In the U.K. and Ireland, 28 percent said they’re very well prepared; 58 percent said they’re moderately prepared.
• 30 percent of industry executives in France said they’re very well prepared, and 53 percent are moderately prepared.
• 40 percent of executives in Germany are very well prepared, with 45 percent moderately prepared.
• In the Nordics, 43 percent reported being very well prepared, and 45 percent said they’re moderately prepared.

Natixis reported fairly consistent numbers on the “not very well prepared” category. Eighteen percent of executives in the U.S. responded yes to this question. For the U.K. and Ireland, the number was 15 percent. In France, Germany and the Nordics, the responses came in at 18 percent, 15 percent and 13 percent, respectively.

Other survey responses regarding Solvency II:

• 60 percent said that implementation costs are a major issue.
• 42 percent said they’re concerned about post-regulatory data management issues.
• 40 percent said they worry how the new regulations will effect their investment management strategy.

Solvency II may require a lot more effort on the part of insurers doing business in Europe or based there, but A.M. Best said it doesn’t expect to take any rating actions directly connected to the launch of the new regulatory regime.

As A.M. Best noted, European insurers will have to comply with both a solvency capital requirement calculated to a 99.5 percent confidence level over a one-year period and a minimum capital requirement calculated to an 85 percent confidence level, also over a year. As envisioned, the requirements are designed to help insurers endure all but the most severe economic shocks and also protect policyholders from unacceptable risk.

Sources: Natixis Global Asset Management, A.M. Best