Clearwater’s 2016 Solvency II Survey gathered data from insurance professionals across Europe to address main concerns with processes, tools, and more resulting from the rigorous requirements of Solvency II. Clearwater received detailed responses from a wide variety of insurers which we compiled in the 2016 Solvency II Survey Report.
Here are some of the top highlights from the report.
1. Investment Accounting Solution vs. Relying on Custodians and Asset Managers
Insurers who choose investment accounting software with built-in Solvency II capabilities meet the regulatory requirements with fewer challenges and less pain. Additionally, insurers who use Solvency II investment accounting and reporting solutions are not tied to their asset managers’ reporting capabilities. They can choose their asset managers based on how well they manage assets—rather than on how well they can report on those assets.
2. Scalability and the Burden of Manual Processes
The 2016 implementation of Solvency II pushed investment and accounting teams outside of their established processes and created a need for new solutions and strategies. 40% of insurers who relied on custodians or asset managers to provide data—a process that by its nature requires varying levels of data manipulation—said that they had trouble overcoming the cumbersome manual challenges of Solvency II.
3. Automation vs. Increasing Personnel
As demonstrated in the quotes below, insurers repeatedly described increased automation as a crucial change they would like to make to their Solvency II filing process. However, 15% said they would like to hire more people. There is clearly a difference between the target operating model of automation versus the current reality of needing to hire additional personnel. Insurance companies are looking for a solution.
4. Data Challenges
Survey results consistently pointed to data as the most challenging aspect of Solvency II compliance. The complexities of obtaining the right data; the time-consuming task of consolidating the data; the error-prone process of refining data; nagging concerns that data was not detailed enough; and the many ways that data could go wrong were all clearly overwhelming for many insurers. 61% of respondents who used a custodian or asset manager as their Solvency II solution said that data was their biggest challenge. 100% had difficulties with look-through data.
Read the full 2016 Solvency II Survey Report to learn about the top challenges of Solvency II, which tools and processes insurers use to address these challenges, and more.