Mastering the data management challenges of Solvency II

There are potentially huge advantages for insurers to opt for an internal model rather than rely on Solvency II’s standard formula, but the governance challenges inherent in this approach are significant. Michael Hoye, senior director of enterprise risk services at Prodiance Corporation, explains how to avoid the pitfalls this presents

The final shape of the Solvency II directive is still to be settled, but without doubt it will have a significant operational, financial and regulatory impact on insurers in the European Union (EU) in the near future.

One of the main changes - particularly for insurers in regimes still operating under Solvency I regulation - is the option to use an internal model. While not compulsory, the advantages of moving to an internal model have been recognised by the industry: according to the third