Chief Risk Officer
Solvency II Directive: a catalyst for an improved risk management culture
The insurance sector faces the challenge of implementing new legal obligations such as Solvency II. The experience of P&V Group clearly illustrates that SAS has everything in place to help insurance companies comply with this directive. What's more, P&V Group decided to use the implementation of SAS as an opportunity to embed risk assessment into its day-to-day activities by converting its dispersed client, sales, actuary, finance, and risk data into consistent and ready-to-use information. As a result, P&V Group can use trends and output of the SAS-based analysis system for the legal reports required in the Solvency II Directive, as well as for internal risk management and reporting.
Choosing SAS enabled us to convert our dispersed data into consistent and ready-to-use information, available for the implementation of Solvency II, as well as for improving our risk management framework.
Embedding risk management into day-to-day activities
The P&V Group is a cooperative insurance company active in Belgium and Luxembourg. It offers private and self-employed persons, companies, and organizations a broad range of insurance services via different brands and through various distribution channels. The P&V Group has 1,822 employees and is the sixth largest insurance group in Belgium.
Converting large quantities of data into ready-to-use information
P&V Group administers a great deal of client, sales, actuary, finance and risk data. For a number of reasons however, this data was not easily accessible. For example, because of mergers and acquisitions, similar information was stored in several different sources and/or extracted in different ways. The result was that different IT systems within the group were used for the same functions, often utilizing different definitions and different interpretations for the same items and concepts.
Knowledge inside the group was dispersed, with various individuals managing segments of the same type of information. In addition, some information lacked owners or ownership and documentation was missing for some processes. The implementation of a multi-purpose SAS-based business analytics (BA) solution gives P&V Group better access to its data. "We chose SAS, because of our positive experiences with and extensive knowledge of SAS tools," says Jan Strauven, IT Business Alignment Manager at P&V.
"SAS is also a leader in our domain. Its tools offer the features and functionalities that we need, including a comprehensive insurance model that enables the integration and analysis of large quantities of insurance data from various sources." P&V Group will be able to use the complete, coherent, and trustworthy information from the tool as a competitive weapon in its decision-making processes for the group's clients, sales, actuary, finance, IT, and risk departments. The group can also use this information to proactively manage its risk exposure.
Implementing regulatory obligations, improving risk assessment
With the mandatory implementation of the Solvency II Directive, P&V Group needed to upgrade its SAS-based insurance model to meet the new reporting requirements. "Solvency II obliges us to provide fast, correct, reliable, repeatable, auditable, and transparent information to the supervising authorities and the public," says Raffaele Barbera, Chief Risk Officer at P&V Group. "We decided to use this obligation as an opportunity to better embed risk management into our day-to-day activities."
P&V Group decided to replace several small company projects with a single all encompassing one. In order to make this possible, the group extended the scope of the SAS-based data warehouse project and added a risk engine and reporting tool. This SAS-based system will automatically generate both required external reports and internal risk assessment dashboards.
Close collaboration is the key in developing a successful tool
During the project, P&V Group collaborated closely with the SAS consultants. "We particularly appreciated the flexibility of the SAS team. We maintained close and continuous communication with the SAS IT architects and, together, looked for solutions to every issue that turned up during the project. Both Barbera and Strauven note that as a result, they were able to build the solution that perfectly answered all of their needs. "Another main success factor during the project was the involvement of our employees. We had installed a centralized discussion and decision forum to gain feedback from everyone that was going to use the system. Employees helped shape the system by proactively adding new data and input."
"Solvency II will introduce official reporting to the supervising authorities as of 2014, with a transition period starting in 2013," observes Audrey Bouche, project leader Solvency II at P&V. "The SAS tool will enable us to meet the required statutory obligations in a structured and controlled way. We are very confident that we will be ready when the directive is implemented.
However, it is equally important to note that we have gained much more than simply meeting new legal requirements. We will also have a ready-to-use risk management tool and a solid base for our enterprise data warehousing that can deliver KPIs for our client, sales, IT, actuary, finance and risk departments, as well as our management team."
P&V Group gained significant insight from its implementation of the Solvency II Directive.
- Implement changes step by step
Do not let time constraints or legal obligations pressure you into pushing for too fast of a delivery; start with realistic, digestible parts of the project.
- (Data) quality remains the key
Do not let timing fool you into lowering your quality.
- Continuously testing the tool
Ensure professional testing, from the very start of tool development to its completion.
P&V Group receives award for its SAS insurance project
The collaboration between P&V Group and SAS to implement Solvency II has been acknowledged for its outstanding characteristics. "SAS internally selected our project for its 2011 Best Business Solution Project award.
In addition, the audience at the SAS Forum 2011 voted our presentation the Best Paper Award. Several insurance companies are now working together with SAS and will profit from our pioneering work. There is no doubt that this project will have an enormous positive impact on the future of P&V Group," concludes Jan Strauven.
Implementing the Solvency II Directive and embedding risk assessment in day-to-day activities
- Improved competitiveness: The translation of client, sales, actuary, finance, and risk data into ready-to-use information improves P&V Group's decision-making and efficiency.
- Answered statutory obligations: The SAS solution enables P&V Group to meet its statutory obligations under Solvency II.
- Improved risk management: Because P&V Group can easily access its information and detect trends through automatically generated reports (dashboards, KRIs/KPIs, etc.), it can proactively manage its risk.