Solvency Approach Options

Organisations will be starting from different places, and will have different goals for the Solvency II programme. Distinct believe there are 2 key questions organisations need to consider:

We believe the implementation of Solvency II need not be seen purely as a compliance exercise, but instead as an opportunity to support business-wide improvements, such as improved data quality supporting more effective and efficient decision making processes.

Insurers who plan on this basis stand to gain a significant competitive advantage as well as a smooth flight path to meeting the regulatory and legislative timetable and requirements.

The real winners will be those insurers that do more than aim to be ready on time and instead aim to use it as a focal point for improving risk management as a means to earn better returns for their shareholders.

Engaging in the Solvency II planning process early will ensure you identify and quantify where resources and effort will need to be applied. Perhaps a telling perspective is that some of the organisations which started this process early are also those who are now most concerned about delivery within the required timescales. Particular concerns have been expressed in data quality, the practices and procedures around risk management and capital based performance reporting, the associated data capture, and in the cultural change required to meet the ‘Use Test’ requirement.

Planning Considerations

A pragmatic, phased approach can be followed to the delivery plans, including some “workarounds” to deliver immediate compliance to the ‘hot spots’, while the changes likely to take considerable time and effort can be over a realistic timeframe It is also important to secure the right mix and expertise of internal and external resources to make the changes. The plan should take into account how to ensure the deliverables and the ability to demonstrate the way SII has been delivered and built into the organisational culture can be demonstrated to align with the FSA’s needs and requirements.

Distinct Solvency II Checklists

Distinct have prepared a number of simple checklists which provide a quick assessment of SII preparations. Email  Kevin.miller@distinctpartners.com for any of the free checklists listed below.

A. SII Planning Checklist - e.g. Clear ownership; Communications Plans; Gap Analysis; Budget & Resources

B. SII Scope & Benefits Checklist - Some of the potential benefits to keep in mind when deciding on the scope and aims of an SII programme, and whether they are best achieved by simply getting regulatory approval, or to make further improvements on the back of these changes

C. SII Key Role ‘Ready Reckoner’ - What level of involvement should each key role have in each of the key elements of SII (e.g. Governance, Financial Resources, Internal Models)

To read more about Distinct's Solvency II Services, click here>