Contributor: Petra Wildemann
Our last post discussed the fast approaching deadlines for Solvency II compliance. Today, I’d like to look at how insurers can best plan their own roadmaps to compliance.
The time and resources required for Solvency II compliance are the crux of the problem for most insurers, as current risk management systems and processes are disjointed and unable to provide the full transparency and audit capability required by Solvency II. This multi-faceted challenge will require a significant investment of time, money and people — particularly for the IT department — in order to develop new tools, processes and procedures. Despite the requirements, the recent SunGard study found that insurance IT professionals are behind the curve in Solvency II planning. Whether this is because business teams have been late to invite IT to the party, or because IT has been slow to respond is unclear.
Key needs include the following:
- A controlled, auditable IT environment to support enterprise-wide decision-making;
- A comprehensive enterprise risk management framework that supports risk modeling for value capital, assets, liabilities, liquidity, credit, market and insurance risk;
- Robust data governance and control measures to better manage the flow of information and support risk reporting;
- An enterprise-wide data warehouse to provide a 360° view of risk;
- Standardized extract/transform/load (ETL) strategy to validate accuracy and relevancy of data;
- Powerful analytics tools to empower informed, C-suite risk-based decisions;
- A high-capacity platform to shorten reporting cycle times and accelerate the risk management process.
Insurers are bracing for the impact that the scale, timing, and costs of this transformation will impose. While many solution providers focus on specific areas of Solvency II, there is no one, comprehensive solution designed specifically to help insurers with the transition.
From an IT perspective, Solvency II compliance is an opportunity to design and implement an integrated risk management strategy that goes beyond regulatory compliance. CIOs need to create a plan of action that assesses the state of current enterprise applications, identifies functionality gaps and creates an implementation plan for the needed systems and infrastructure upgrades.
Are you ready for Solvency II?
SunGard iWorks Solvency II Resources: