The financial crisis we experienced ten years ago resulted in a substancial amount of public money being injected into banks to save them from failing and thus letting the taxpayers carrying the burden. The crisis revealed the need to overhaul the regulatory framework for banks and gave rise, via the Bank Recovery and Resolution Directive, to a new cross-border resolution mechanism for the Banking Union.
Published by Clear Path Analysis, the 6th annual Insurance Risk & Operations, Europe report brings together Heads of Solvency II, Chief Risk Officers and Chief Operating Officers to discuss the operational implications of Solvency II. Interviewed amongst other expert contributors, Antoine Bourdais gives his feedback and vision on how to master pillar 3 reporting, understanding the real challenges and developing future-proofed, industrialised processes.
The road to Solvency II reporting has not been easy. For Lloyd’s syndicates, complying with the additional challenges of the Lloyd’s market regulations, things are perhaps even tougher. Managing agency Asta explains to Sarfraz Thind how it is preparing for lift-off next year.
In this expert opinion article, Invoke's Anne Leslie-Bini looks at how successfully managing the reporting and disclosure aspects of Solvency II involves mobilising a cohesive, cross-competency skill-set. She draws on Invoke's extensive industry experience to offer a number of recommendations aimed at de-risking the delivery of the very specific outputs that Pillar 3 demands by encouraging firms to maximise their agility through future-proofed infrastructure and data governance mechanisms that will support their businesses over time.
Pillar 3 of Solvency II has long been considered the 'forgotten child' of the Directive, paling in perceived importance compared with Pillars 1 and 2. It is only since the publication of the Interim Guidelines by EIOPA on 27 June 2013 that the wider insurance industry has really begun taking the issue seriously.
Having dedicated the equivalent of over 15-person years to the development of a unique suite of native XBRL applications for managing the entire regulatory data value-chain for COREP and FINREP (that covers creating, visualizing, editing, validating, storing and re-using XBRL instance documents), Invoke has all the functional, technical and domain experience needed for advising and accompanying firms in managing the transition to COREP and FINREP reporting in XBRL.
Since the publication of the finalized CRD IV Package in the Official Journal on 27 June 2013, the European Banking Authority (EBA) now has a clear timeline for managing the unenviable task of getting Europe’s 8,300 credit institutions and 32 National Competent Authorities (NCAs) to all ‘speak the same language’.
Europe’s CRD IV regime will substantially increase reporting requirements for banks in Europe, but will also enable firms to report more efficiently in future. At the same time, the overhaul is prompting firms to think about centralising and standardising data, which is also the cue for a rigorous evaluation of the technology used to support firms’ data strategies.
Solvency II imposes extensive reporting demands on insurance companies both in the speed and frequency with which they are required to generate reports and the information they must provide. Insurers are facing difficult choices about what to do in the face of uncertainty surrounding the directive and how far to automate the reporting process, as well as practical challenges such as how to collate the data required for reporting and how to staff and organise themselves for the new regime.