Technology is needed to meet regulatory changes
Changes proposed under Solvency II, Own Risk and Solvency Assessment (ORSA) and other European directives have been positive for the insurance industry overall but as continue to strengthen compliance procedures insurers must utilise technology to drive through efficiencies and deliver income for their legacy book of business.
That was the conclusion of a report by Clear Path Analysis called ‘Technology and Operations for Insurers’ which examines how best to satisfy new regulatory frameworks whilst optimising business functions through the smarter application of intelligent data and innovative technology systems.
“Solvency II has not necessarily been an end in itself but has provided a catalyst for changes to be made for the good of the business,” said Philippa Herz, group head of risk at Bupa.
Andrew Melville, EMEA head of insurance product and strategy at Northern Trust, said: “Regulatory reporting for an insurer with a multi-manager investment model is likely to be an arduous and complex process in which the ability to store all asset-related data in one place will be a significant advantage.”
The industry though, does have some time to breathe. Tristan Garnons-Williams, policy adviser, Solvency II, Prudential Regulation Directorate, Association of British Insurers (ABI), stated: “Insurers require a period of certainty in relation to the ‘steady state’ rulebook before the regime comes into force; a period of 18 months should enable most insurers to adequately prepare their businesses for Solvency II implementation.”
Melville added that the directive will also require much more reporting on insurers’ asset data from multiple sources and for many new forms of data potentially leading to significant new challenges in managing all this information.
He expanded: “While not directly aimed at insurers, this measure [FATCA] is likely to be particularly relevant for life insurers, where cash values are provided through annuities, endowments and other payments.”
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