This Financial Times report asserts, perhaps too strongly, that Solvency II will trouble European mutuals upon its 12/12 implementation. Sez FT:
Some small and medium-sized mutual insurers could be driven out of existence by the introduction of Solvency II, according to a report by credit reference agency AM Best.
AM Best’s report is more nuanced. It mentions Solvency II as a headache, mainly to smaller mutuals. (those writing just more than than €5 million. S-II will likely exempt the smallest.) But S-II is only one of four potential threats. Others are limited access to capital markets, increased regulation and the need to cut expenses. It notes that some mutuals are looking to cross-mutual affiliation and reinsurance to relieve the strain. The report seems to imply that the lack of access to capital markets is the most problematic.