84% of European Insurers Unprepared for Solvency II – BearingPoint Report
Dublin and Frankfurt, May 10, 2012 – 84% of European insurance companies have still not implemented a reporting framework which will be required under EU Solvency II requirements, according to a report by management and technology consultancy BearingPoint (www.bearingpoint.com), which surveyed more than 350 European insurers, including a number in Ireland.
While the primary focus of preparations for Solvency II is on Pillar 1 (capital efficiency) and Pillar 2 (risk management), little attention has been paid to Pillar 3 (reporting). “Only 16% (of Insurers) are prepared to deliver the required quarterly and annual reports to the respective EU supervisory authorities,” according to Patrick Maeder, Head of the Insurance Segment in BearingPoint, which employs approximately 200 people in Dublin.
The survey also revealed that around 40% of participants underestimate the complexity of Solvency II reporting. But more than 60% plan to decide on a package within the coming weeks and months. “Reporting is still a low priority. So far, insurers have not fully recognised the added value of a Pillar 3 analysis,” added Mr. Maeder. “When data management is considered, our experience shows that an early review of Pillar 3 requirements significantly reduces the time and effort needed to implement Solvency II in full.”
The report follows latest news from the EU-Commission that June 30, 2013, is the new date to which all insurers in Europe are required to bring their Governance, Risk and Compliance processes and systems in line with the EU’s Solvency II directive.
Professional Solvency II solutions preferred
According to the survey, most European insurers prefer professional support for their disclosure processes. Only 15% will opt for an in-house reporting solution with 85% planning to use a standard market solution. Frank Meys, Head of Solvency II at BearingPoint, explains: “At the moment we can observe a trend in the market away from in-house developments towards standardised IT solutions for Pillar 3. The main reasons for this are risk mitigation and the lower cost of implementation and maintenance.”
BearingPoint has developed a pan-European reporting solution for Solvency II that covers both standard and local requirements. ABACUS/Solvency II is in accordance with all quantitative reporting templates (QRTs) currently defined by the European Insurance and Occupational Pensions Authority (EIOPA) and will be updated whenever necessary to reflect subsequent regulatory changes.
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