Shaping Solvency II to create business value
Europe is about to see the largest ever change to its insurance solvency regulations. This is in the form of Solvency II.
European insurers are obliged to implement the full Solvency II requirements by October 2012. This will be a major driver for the development of Enterprise Risk Management (ERM) for the insurance industry. For most, it entails a challenging transformation project.
These programmes are complex and highly technical and we find clients are struggling to provide the people, deep technical skills experience to implement programmes on this scale.
A significant challenge to insurers
Implementation of Solvency II is built around a “Three Pillar” concept.
Most clients are tackling Solvency II with a predominant focus on the development of complex internal capital models required under the Pillar 1 provisions.
Whilst this is fundamental it risks not achieving the main goals of Solvency II which is a fundamental business process and behavioural transformation where risk is much more at the heart of day to day management.
Our advice to clients is to focus initially on Pillar 2, the Governance, risk management and transformation of core business processes and let this drive the business and information requirements to be met by Pillar 1, capital models.
Helping clients work faster
In the last year, we have worked with over 60 insurance companies in the UK to help them assess the implications of Solvency II on their business and plan for its implementation. We are now moving into detailed design and implementation programmes with these clients.
We have gained tremendous understanding of the Solvency II requirements and produced a large number of implementation accelerators which help our clients understand what their individual requirements for Solvency II need to be.
These accelerators are enabling our clients to cut months off the implementation process and save hundreds of thousands of pounds by being able to move quickly into detailed design and implementation.
