United Kingdom

Details

  • Industry: Financial Services, Investment Management
  • Date: 26/06/2012

Solvency II - Data Impacts on Asset Management 

 

Solvency II is the most comprehensive regulation ever imposed on the insurance industry across Europe. The essence of the Directive is to require insurers to provide transparency over their risk and the levels of capital held to cover that risk.

 

Insurers are required to demonstrate that they have fully defined, assessed, governed, quality tested and (where necessary) remediated the data that is material to Solvency II. The Directive states that ‘external data’, i.e. data provided to the insurer from a third party, must also be held to these standards and therefore insurers will expect their data providers to assure them that these standards have been met. Solvency II has also created new requirements for the provision of asset data in the form of new data fields, new data coding conventions, greater granularity of data and increased frequency of reporting.

 

Additionally, Solvency II sets out a range of capital charges for each asset class which is likely to influence insurers’ asset allocation strategy to ensure optimal use of their capital whilst continuing to address their asset-liability matching requirements.

 

The European Fund and Asset Management Association (EFAMA), in conjunction with Aviva Investors and KPMG, created a working party of representatives of EFAMA members and KPMG to consider the implications of Solvency II on the investment management industry. The primary focus of the working group was to consider the data implications of the Solvency II Directive.

 

The working party met in a series of workshop sessions to assess various topic areas, identify challenges and impacts, and propose potential solutions based on their expertise and experience of Solvency II to date.

 

This report is the product of the workshops sessions and other published material from EFAMA members and KPMG. It is intended to provide practical guidance for members of EFAMA on the data impacts of Solvency II.

 

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