Focus on regulation – White paper spells out steps to Solvency II technology readiness
The independent research unit of Simcorp has produced a comprehensive report on what Europe’s asset managers, insurers and other financial industry practitioners need to do, primarily in terms of IT systems, to be ready to meet demands put upon them by Solvency II provisions.
Author Nicolas Michellod, senior analyst at Celent, says, although the provisions are a “political work in progress” insurers needs to be examining whether their infrastructure is up to handling the demands of the forthcoming rules.
“Maximising existing hardware and software is an advantage of the build approach, but doing so may well encourage suboptimal decisions in the design of the application,” he says.
“Experience shows that a customised solution typically has a longer implementation time, greater risk of failure and is unable to benefit from innovation driven by a vendor.”
Lars Falkenberg, assistant director of SimCorp StrategyLab, adds: “Complying with Solvency II is crucial for insurers, but they are not alone in facing an increasingly constrained regulatory environment. Beyond insurers, asset managers, pension funds and more are dealing with global compliance challenges.
“Internal IT infrastructures may work, but these organizations need to ask themselves the hard questions in determining whether these solutions can truly keep them ahead of the regulatory curve in this ever-changing environment.”
To see the report, entitled Preparing for Solvency II: Three key questions insurers need to address early, click here: Preparing for Solvency II