solvency ii -the practicalities around programme governance & data
DESCRIPTION
This was the Gain-Line presentation at the ILAG Solvency II WorkshopTRANSCRIPT
Solvency II
The Practicalities Around ProgrammeGovernance & Data
Gain-Line & Solvency II
Solvency II is the biggest ever exercise in bringing together insurers and re-insurers under one regulatory regime.
Solvency II Programme
Slide 2
• Solvency II is a set of principles and guidelines leading to best practice in risk
management;
• It is an Enterprise-Wide initiative that will impact all areas of the business;
• Early adopters are helping the FSA set the bar for what is required in the
Market;
• The range and diversity of insurance operations means that a Solvency II
solution will vary from company to company;
• Numerous approaches are being adopted across the market and it not a case
of one size fits all;
• The eventual solution in each case will depend on a range of inputs from a
number of different disciplines.
Who Are Gain-Line
The Gain-Line Group is a consortium of specialist companies who have come together to deliver a solution for Solvency II
Solvency II Programme
Slide 3
Gain-Line & Solvency II
Solvency II Programme
Slide 4
• Chief Actuary – centralised and consistent modelling
approach for all actuarial ensuring realistic ‘what-if’ and
scenario planning;
CA
CRO
• Chief Risk Officer – enterprise wide consistent risk
management standards and transparent risk modelling
approach;
CIO
• Chief Information Officer – robust IT governance
with a consistent approach to data controls & quality;
CFO
• Chief Financial Officer – faster reporting timetable with a consistent approach to
financial and management information;
CEO
• Chief Executive Officer – enhanced business performance through risk-based
decision making and more efficient allocation of capital.
There are many stakeholders with differing priorities that need to be integral to the Solvency II Programme
Solvency II Components
Programmes will be challenged to align a variety of different functions as Solvency II will impact all elements of the Business
Slide 5
Solvency II Programme
(inc Programme Office)
Internal Model/Risk Management
ORSA and the 6 TestsRisk Management
Data Quality & Governance
Solvency II Data Repository
IT Systems & Processes
Systems & Data
Governance & Oversight
Documentation, Comms & Training
Governance &Communications
External Reporting
Standard Formula
Portfolio Management
Calculation Kernel
Assets & Asset Liability Management (ALM)
Balance Sheet &PortfolioManagement
Technical Provisions
Data Policy & Governance
The Data Policy should define the complete needs of all data and all data users across the organisation
Slide 6
There are a number of areas of consideration for Data Policy & Governance
Solvency II Programme
Slide 7
• Complete, Accurate & Appropriate;
• Meaningful to the business and value adding;
• Compatibility with shared systems, data warehouses, part of a bigger group?
• Enterprise Wide vs. Focus on Internal Model?
• Risk management Overlay vs. Embedded?
• Producer/Consumer approach to overcome issues with data flows across
various functional areas.
Data Policy & Governance
Systems & Data
An approach to managing the various key areas is given below
Solvency II Programme
Slide 8
Data Directory
The Data Directory is the central foundation on which the data workstream is built.
Slide 9
• Is mandated by Lloyd’s;
• Guidance has been produced based on CEIOPS’ guidance;
• Each row represents a group of data which relates to an Internal Model Input;
• Key input into the Internal Model.
Data Dictionary
A working tool which is used across the whole Solvency II Programme
Slide 10
• Much more detailed/granular with respect to the data;
• Owned by the data architect;
• Shows the lineage and characteristics of each individual data field;
• A number of tools can be used to hold the Data Dictionary.
Data Flows & Controls Diagrams
The Data Flows & Controls Diagrams (DFDs) pictorially represent how the data is manipulated and physically moves within the organisation.
Slide 11
• Created for each row on the Data Directory – i.e. for each Internal Model Input;
• Should cross-reference the Data Dictionary;
• Overall data quality and governance can be seen by incorporating the data
controls.
Data Controls Register
The Data Controls Register (DCR) is the central repository that contains all of the data control across the organisation.
Slide 12
• The DCR categorises the controls into a number of sub-categories so that
weaknesses and deficiencies can be identified.
Reports Register
The Reports Register (RR) highlights all of the reports and reconciliations that occur to the data as it moves through the organisation.
Slide 13
• The RR categorises all of the reports (both manual and automated) that are
used within the organisation to see the effectiveness of the controls.
Solvency II Programme
Slide 14
• Solvency II, uniquely, effects all areas of an organisation;
• Programmes need to be structured in such a way to address this;
• ‘C-Level’ Executives are accountable for Solvency II;
• Different organisations will have different requirements dependent upon the
systems/legacy landscape;
• Data is central to the concept of Solvency II;
• Minimum standards and requirements must be delivered.
Kesh Sharma – Director of Magellan Consultancy Services
Part of the
In Summary…
End of Presentation