For Life Insurers, look-through is not optional. Under Solvency II they have a ‘know your assets’ requirement on an economic substance basis ie irrespective of whether assets are held directly or indirectly through Collective Investment Undertakings (CIUs). Their Solvency Capital Requirement (SCR) computation is also based on look-though data. However asset look-through shouldn’t be viewed as a compliance headache: it will provide new information for life insurers, and by deploying the right technology to facilitate these mandatory requirements insurers can actually serve to benefit their compliance, risk and operational functions.
For Asset Managers the impact is different. As generators of look-through data, how it is provided can be approached in 2 different ways: A strategic opportunity for the asset manager or a minimum-work-approach to meeting a new regulatory requirement for their clients. Without a doubt, those unable to facilitate the provision of look-through risk losing their mandates from insurers. But for those Asset Managers offering top service and utilising dedicated technology tools to provide the required asset data, opportunity exists to win more and new mandates.
A new report from Financial Risk Solutions (FRS) examines these challenges and practical issues around look-through asset reporting for both Life Insurers and Asset Managers. It also looks beyond the mandatory application of technology to consider how the right software and systems can transform these challenges and issues into enterprise-wide opportunities for both types of organisations.
This single document contains all the key information relating to Solvency II look-through, traversing the regulators, Life Companies and Asset Managers, and can be accessed below
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