Solvency II is the European insurance industry’s Y2K, with a host of vendors competing in the space. Although insurance companies have been preparing for Solvency II for a couple of years, not all have made their decisions about the technology still needed to address all elements of the new regulation framework.
The reporting requirements of Solvency II present insurers with significant challenges both in the frequency and granularity of information demanded. Much of the reporting is required on a quarterly basis and regulators want the ability to completely look through the information, from a top-level dashboard view to source data such as policyholder records. In addition, the exact reporting requirements are still evolving and significant differences exist between national regulators.
Based on our discussions with European insurers, we have noticed that the methodology used to align information systems to meet the new solvency regulation cannot escape the difficult dilemma of prioritizing a best-of-breed solution over the enterprise solution approach. says Nicolas Michellod, Senior Analyst with Celent’s Insurance Group and author of the report. but one argument in favor of the purchase of components or Solvency II solutions is certainly the support IT vendors can offer in terms of adaptation to changes to the regulation, he adds.
According to a survey by management and technology consultancy BearingPoint (www.bearingpoint.com), which surveyed more than 350 European insurers in various key markets, most European insurers prefer professional support for their disclosure processes. Only 15 per cent will opt for an in-house reporting solution with 85 percent planning to use a standard market solution.
Are you ready for Solvency II?