Insurance companies are not yet in panic mode, but they are facing many challenges with their Solvency II projects. On April 11th SAS Denmark hosted a Solvency II seminar that included speakers from HSBC Insurance, PwC, Accenture and SAS to discuss the implementations on the EU Directive.

Janus Mens, Partner with PwC compared Solvency II projects to a three-legged stool. “Management, risk strategy, risk appetite and process are one leg. People, rewards and governance are the second leg. With technology and infrastructure the third leg. The stools falls over when one of its legs is missing.”. In addition Janus, explained that a shortage of key resources, as well as the data and data quality requirements for Pillar 2 and Pillar 3 are the greatest challenges facing insurers. Stephen Coombes, CFO of UK Insurer HSBC Insurance, gave an interesting analogy for the complexity of Solvency II. Stephen said, “A Solvency II project is a like an onion. The core of the onion consists of the data. While the many layers represent the risk appetite and overall framework of risk management.” However he does view Solvency II as an opportunity for his organization to achieve both compliance and a foundation for better decision making processes. HSBC intends to roll out its Solvency II project first to the UK, then Europe and finally to its global organization as it aims to become a global top 10 insurers within the next 10 years.

Accenture’s Bent Dalagar, presented findings from a 2010 Accenture survey , which indicated that insurers had underestimated the size and complexity of this directive. In fact, 57 percent of insurers had stated that their Solvency II projects were more expensive than originally planned.

Allan Cervin, SAS Insurance Sales Director, concluded the event by summarizing the key findings from the day: Not only are management involvement and IT integration basic necessities, but high quality data is vital and a prerequisite for the overall project.

For more information, copies of the slides from this Solvency II event are available, or you can download a white paper: Solvency II: How SAS can ease your implementation worries?

I’m Stuart Rose, Global Insurance Marketing Manager at SAS. For further discussions connect with me on LinkedIn and Twitter.