A lot of what Solvency II addresses is improving transparency across the firm, between the firm and its regulators, and with the customer. SAS recommends these six data quality process steps to support Solvency II initiatives.
Do you know how your data gets to your desktop each morning? Do you know where it comes from? The Solvency II directive has made the question of where and how very important to insurers and resurers across Europe.
Nicolas Michellod, Senior Analyst in Celent’s Insurance Practice, says that although insurers have been preparing for Solvency II for a couple of years, not all have made their decisions about a technology vendor that addresses the new regulatory framework.
No industry is immune to failure, and over the past few decades, there have been several examples of significant insurance company failure. Long before the financial crisis emerged in 2008, it had been recognized that existing risk management and solvency regulations were inadequate. Solvency II is probably the most ambitious financial services legislation ever implemented. It will completely change the measurement of the financial stability of European insurers.
Solvency II implementation costs may shave a few cents off earnings per share, but this cost should be balanced by the benefit of a far more transparent – consistently transparent – set of reporting requirements than before. This valuable information will lead to improved economic planning and insight, and the ability to embed early-warning mechanisms.
ORSA seems very similar to the process for calculating the regulatory financial buffer the ‘Solvency Capital Requirement’ but there are differences – Simon Kirby explains.
As the Solvency II go-live date approaches, insurers and reinsurers in many EU states are already beginning their compliance projects. But searching for the right processes and technology updates can be daunting – almost as though you are under the legendary Inspector’s eye. What type of data audit will be necessary?
Thorsten Hein asks, “Are you a gambler?” When it comes to Solvency II implementation, Hein argues that insurers that concentrate only on the most immediate aspects of compliance will miss out on many of the business benefits that those who fully comply will gain. Their ‘savings gamble’ will actually be a loss.
The Solvency II directive is the first insurance regulation to introduce strict requirements for data management; it also represents an opportunity for many organizations. Effective data management results in better risk decisions, reduced likelihood of regulatory-imposed capital add-ons, increased return on capital, higher return on marketing campaigns and better fraud detection.
David Buckham, Founder and President of Monocle Solutions, says Solvency II directives are designed to benefit policy holders adn insurance companies. Learn how your firm can benefit from implementation and gain a competitive advantage.