Solvency II – the great race: An integration challenge


Peter England

Preparing for Solvency II and deriving longer-term benefits from the work involved is pushing the envelope of software and business integration, says Peter England.

Solvency II has forced companies of all sizes into a fundamental choice between whether to use the standard formula or a full or partial internal model to calculate their solvency capital requirement (SCR). For those mainly smaller companies that have been wavering, the recent release of the final specification for the fifth quantitative impact study (QIS5) will bring the issue to a head.

But for the majority, the decision has already been made to use an internal model, subject to regulatory approval. In most cases, the SCR will be lower with a model—on average about 20 percent less, according to previous QIS rounds. Regulatory oversight will also be more in tune with a company’s own risk profile and appetite.

EMB’s financial modelling package, EMB Igloo™, is already providing the foundation for several companies’ Solvency II model implementation projects. Available in three editions, more than 500 user licences have been sold worldwide since 2001, the majority in Europe.

Solvency II, EMB, QIS5, EMB Igloo, ICE

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