85% of insurance risk professionals believe they are under-utilising technology at a critical time in the preparation for Solvency II.
The finding has been uncovered as part of a recent survey carried out by Clear Path Analysis as part of preparations for the Risk Technology for Pension Plans report available now. The survey asked insurance technology professionals who specialised in the area of risk management and governance to outline their opinions on a range of subjects surrounding how risk technology is used within life and general insurance groups.
Other findings also uncovered included:
– 74% of insurance managers said rationalising which operation areas technology systems must address was a top 3 issue
– Just under half, (47%) said the task of engaging staff and outsourced providers to use new technology was a challenge stopping them acquiring new systems
– Nearly 1 in 3, (29%) said they desired technology to get as close to real time transparency as possible on operational and business risks faced
– Only 6% said they expected to complete on a new technology integration in the next 6 months
The survey’s findings demonstrate that with the pressures of Solvency II emerging, the focus on internal processes and supporting infrastructure is intensifying, but uncertainty thrives in how best to develop or identify new technology to meet current and evolving risk management expectations.
David Innes, Head of Economic Capital for Royal & Sun Alliance who contributed to the report said, “The key from a technological aspect is there is no need to make any changes… unless there is a need, for example, for disclosure, be it risk management disclosure or financial disclosure or formula information, because frankly we didn’t ever report it in the past”
Some contributors looked to the banking industry as an example of how they’ve ridden their own turbulent times by preparing in advance for regulatory changes. “If you compare and contrast the banking industry to the insurance industry, it does seem to be the case that the banks are ironically in a slightly better place in having better, fully implemented risk modelling capabilities in place”, commented Bruce Porteous, Head of Solvency II & Regulatory Development for Standard Life Insurance Company commented,
Solvency II has been widely seen as that pressure point that like Y2K would encourage insurers to look inwards at how they managed risk and the systems they employed to carry out functions more efficiently. Paul Barrett, Assistant Director, Financial Regulation, Association of British Insurers, supported this point of view in stating, “Solvency II provides the imperative and the justification for the scale of change in investment that will really take the industry forward again to a next generation”.
Source : Clear Path Analysis
