A report from Deloitte, the business advisory firm, highlights an increase in the number of insurers which plan to reprice and reorganise their product mix in response to the introduction of Solvency II regulations.

Solvency II is an EU legislative programme to be implemented in all 27 member states by January 1, 2013. It introduces a new, harmonised EU-wide insurance regulatory regime. The legislation replaces 14 existing EU insurance directives.

The latest edition of the annual Deloitte Solvency II survey, conducted by the Economist Intelligence Unit, found that 36 per cent of general insurers plan to re-price products in the run-up to Solvency II – significantly up from 19 per cent last year.

The report also found that life companies are more likely to change their product mix – 26 per cent of life companies say they will do so compared to eight per cent for non-life companies.

According to the survey, there has been a big fall in the number of insurers which plan to restructure their business. Less than a quarter, (23 per cent), say they will re-organise their business – down from 47 per cent last year.

Rick Lester, lead Solvency II partner at Deloitte, said: “This year’s survey has identified interesting developments in insurers’ approaches to Solvency II and many have reviewed the way it will be implemented. In past surveys insurers have talked of the need to restructure and reorganise their business; now they are analysing the risks they run and reviewing the amount of capital they need to write these risks, and adjusting their pricing and product mix accordingly.

“By adjusting their product mix, insurers are able to optimise the diversification of the different risks in their portfolios. This may lead some companies to consider acquiring books of business while others may withdraw from some parts of the market. We’re also seeing increasing use of reinsurance and hedging mechanisms across the industry to lay off more capital-intensive risks.”