Bill Murray is my favourite film actor; Lost in Translation is perhaps my favourite film. In it Bill plays a man bemused but fascinated by the similarities and differences between western and Japanese culture. This pretty much mirrored my feelings during my first, very full-on business trip to Tokyo some years ago, though sadly without Scarlett Johansson or the $2m fee his character got for his day’s work.
But today I am strongly reminded of another Bill Murray film. In this one, Bill plays guy caught in a time-loop. He’s a TV reporter sent to cover a local festival in a small, dull town, Groundhog Day. The next day he wakes in his hotel room, I got you Babe is playing on the radio just like yesterday, it is yesterday – Groundhog day again. The same the day after, the day after that… As the day continuingly repeats itself he goes through various stages of surprise, despair, pleasure (when he realises his actions have no consequences), acceptance and finally redemption.
Yes, in Insurance World it is Groundhog Day again. Solvency II has been delayed. Again. (OK not yet officially but more or less a cast iron 100% certainty).
Unlike Bill’s character, my first reaction wasn’t surprise. For the last 7 years or so, Solvency II has mostly been a pretty constant 3 years from implementation. From a 2012 viewpoint, a 2015 implementation seems kind of natural and right. Indeed as we move into 2013 what’s the betting that 2016 looks a more likely bet.
Despair may be a more appropriate response, particularly for those poor unfortunates who have invested heavily, time and money, getting ready for Solvency II.
Some may get pleasure from the delay, particularly those companies (and regulators) who perhaps are not as prepared as they could or should be. The delay in theory gives time for a fundamental rethink on what Solvency II is meant to achieve, but probably just gives scope for more tinkering rather than radical change.
Unlike Bill’s character in Groundhog Day though, insurance firms can’t run riot and ignore the rules. Regulator, rating agency and shareholder expectation has changed about how insurers should be run and capitalised. That genie won’t get back In the bottle. Acceptance is necessary, not just of the delays in Solvency II but more importantly of how the rules of the game have changed.
As for redemption, well with Bill’s character’s redemption was via love of a woman. Solvency II is a tough thing to love. I guess our road to redemption will be a little more prosaic – hopefully leading to a smarter, better run insurance industry.