Europe’s 40 largest insurers spent as much as €4.9 billion ($6.5 billion) last year complying with new regulations, according to estimates by Deloitte LLP.

The cost is equivalent to a one percentage point reduction in return on equity, a measure of profitability, the accounting firm said in a statement today. Insurers expect the expense to continue at current levels until at least 2015, Deloitte said.

Insurers are grappling with income regulations such as the Solvency II directive that are aimed at making the industry safer. Solvency II, intended to harmonize the way insurers allocate capital against the risks they take across the European Union, was originally scheduled to come into force in 2013. It may not now be implemented before 2016.

“The volume of new insurance rules has increased to a level not seen in decades,” Francesco Nagari, insurance partner at Deloitte, said in a statement. “The new agenda is leaving insurers stretched, uncertain and requiring new capabilities.”

Deloitte estimated that the total cost of compliance from 2010 to 2012 may be as much as €9 billion [$11.88 billion], with the average cost for each insurer exceeding €200 million [$264 million].

Deloitte LLP is the U.K. member firm of Deloitte Touche Tohmatsu Ltd.

Editors: Edward Evans, Steve Bailey