The Role of Technology in Solvency II workshop: executive summary

The Role of Technology in Solvency II workshop: executive summary

• providing 'one version of the truth';
  
• strong data ownership and responsibilty;
  
• better customer service; and
  
• efficiencies leading to enhanced profitability or reduced capital requirements
  

1. Data governance implementation projects are at varying stages along the Solvency II journey. Feedback indicated that many of the participants were at the planning stage and some were moving through the delivery stage but few had reached the use or embedded stage of their data related projects. In general it was felt that the Lloyd’s market was probably more advanced than other market participants because of the concentrated push coming from the centre.
   
   
2. Participants noted that in terms of implementation where they were shifting to the implementation stage the practical aspects were causing concern.


1. Some noted that the early approach of doing the minimum to meet a requirement now meant going back to the drawing board because the initial approach was leading to implementation issues as a result of more depth or greater integration being required in reality or other factors being identified as now needing to be considered.
2. Others noted that greater support was needed to assist in identifying and resolving the practical issues but from a policy, implementation and ongoing monitoring and reporting perspective.
   
   
3. Concerns were also expressed over practicalities such as the potential costs attaching to the project if everything identified as potentially important was done. Over and above the baseline compliance with Solvency II, it was suggested when dealing with decisions on resolving data quality issues consideration is given to the costs and benefits of the remediation actions proposed. Issues should be evaluated in terms of: if this issue is removed then is the potential impact on our model material and will it improve our potential capital position in the long term?
   
   
4. The reliance on spreadsheets for analysis and reporting in insurance businesses was identified as a common issue or problem. Usage of spreadsheet management tools were identified as a possible solution but that these needed to be evaluated against business process improvements e.g. writing of reports from underlying systems rather than their production in Excel using a data download from the system. Cost benefit analysis was clearly a tool to be used here but this needed business process mapping or analysis to identify the control and or quality issue to be remediated.
   
   
5. There needs to be a concentrated management focus on potential business benefits and value delivery if compliance with Solvency II is to be more than a ‘hygiene project’. The key test will be the ‘use test’ in terms of evaluating whether Solvency II’s demand for evidence based decision making has become embedded within the firm. This is of course a desired outcome of the regime which itself demands continuous “use” and “continuous improvement” in the quality of the model, the supporting data and processes, and ultimately the ideal that management and key decisions are improved as a result.