His views come as the International Association of Insurance Supervisors (IAIS) is due to finalise the so-called higher loss absorbency rule for endorsement in November.
Morgan-Moodie said insurers must match their liabilities with real assets, unlike banks, and “the IAIS seem to have arrived at the view that locking in more than is required is a good thing for the insurance industry.
“But such ‘dead’ capital helps no one. Insurance is all about risk management, not about risk aversion.”
He said the IAIS’s position on the issue seemed to be “a reaction rather than a considered appreciation of how well managed these companies really are”.
“Only one insurer, AIG, was rescued by the US in 2008, and that was because of derivative losses on sub-prime mortgages, not part of its general or life core business.
However, he said Axa, MetLife, Generali and the other named ‘too big to fail’ insurers created no cause for concern.
The nine insurance groups, involved in life, pensions and general business, and identified by the Financial Stability Board as global systemically important, are: Aviva and Prudential (in the UK); AIG, MetLife and Prudential Financial (the US); Allianz (Germany), Axa (France); Assicurazioni Generali (Italy); and Ping An Insurance (Group) Company of China (China).
Earlier this week, International Adviser reported that Prudential was considering again a move away from its UK headquarters to Singapore or Hong Kong, in reaction to the Solvency II regulations, due to go live on 1 January 2016.
