Insurers gambling future on data quality

In the rush to prepare for Solvency II’s capital risk requirements, insurers are gambling their future by neglecting to analyse and improve the quality of the data they hold. Clive Davidson reports

While the methodologies for calculating risk capital have dominated the discussions around Solvency II, less attention has been paid to the data on which these calculations will be based. This is a serious oversight because whether using a standard formula or internal model, the old computer adage still applies – ‘garbage in, garbage out’. In other words, no matter what the methodology or how sophisticated the modelling process, the results will only be as good as the data on which the