3/5/11
By Sophie Baker
HSBC Insurance UK has begun preparations for the upcoming European Solvency II legislation by signing a contract with IBM, which will see the company assist the bank in a developing and implementing a business analytics solution.
Solvency II, which was originally set for implementation from October 2012 but now looks more likely to arrive on insurers’ desks from January 2013, aims to strengthen protection for all insurance policyholders.
By 2013, every European insurer will be obliged to demonstrate that they hold a certain percentage of capital, correct governance and transparency to cover the financial implications of claim projections and worst case scenarios, should they occur.
The contract will see IBM assist HSBC in the development and implementation of a business analytics solution, providing advanced insight and analysis of the company’s risk management data, so capital can be efficiently allocated to cover business risks.
HSBC will be supported by HSBC in the creation of a data management and analytics model to ensure compliance with Solvency II requirements, and to deliver advanced risk management capabilities. The solution will also provide a store for HSBC’s risk and solvency modeling data, permitting HSBC to demonstrate quality, availability and traceability of all key regulatory data and associated reporting.
John Smith, insurance business solutions partner, IBM Global Business Services, UK and Ireland, said managing risk is one of the top priorities for a financial institution.
“Working with HSBC, IBM is creating a system that will provide the most stringent safeguards for the insurer, its shareholders and customers.”
HSBC’s new database will produce fact-based insight and secure evidence of risk and solvency related decisions. It will use IBM business analytics software as the analytic reporting solution between the new database and system users; the software also enables users to view modeled results data, adapt and enrich reports to meet their needs, and distribute them as required.
“Preparation for Solvency II is critical for our business and demands specialist expertise – we are pleased to be working with IBM on this vital activity,” commented Stephen Coombes, chief finance officer at HSBC Insurance UK.
