Speaking at Moore Stephens’ Solvency II Seminar, Omar Ripon, partner in Moore Stephens’ Insurance Industry Group advises firms to take a long term strategic approach to Solvency II beyond the regulatory box ticking mentality:
“Solvency II is finally becoming a reality and there is no time to waste. All insurers, including the smaller firms and niche companies such as captives, have much to gain from understanding the benefits of Solvency II and thereby reducing their compliance costs.
Smart firms will already be strategically planning well beyond the next 12 months.
“For all firms the priority is Pillar III implementation. This is extensive and uncharted territory in terms of external risk reporting and full public disclosure of risk management. The challenge of implementing and operating an integrated reporting system which addresses both external and internal reporting across various functions and business units is an eye-opener. Such arduous and comprehensive risk reporting, scrutinised by external parties, requires firms to have a long-term strategic vision beyond regulatory compliance mentality.”
Moore Stephens expects firms to carry out detailed Pillar II gap analysis in Q1 2015, if not already done, and to have prepared implementation plans that address the following issues:
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reporting systems and processes;
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data management and governance;
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understanding XBRL and its application;
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integrated Solvency II data warehousing;
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pillar III training for senior management and key staff.
“While Pillar III is the key implementation task over the next 12 months, firms should not forget that all three pillars need to work together in order to comply with Solvency II. Developing an ORSA (own risk and solvency assessment) which is fit for purpose and can be relied upon for business decisions is critical for all firms. There is much to be done, not surprising given the complexity of issues.”
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