You cannot be half Solvency II compliant

More and more people are talking about the data issue under Solvency II. That's good. Given that most firms have struggled with the QIS and focused on how to calculate the SCR, it is high time that the focus shifts towards data. 

From a first glimpse at the reporting templates (QRT) it is evident that most of the data which is needed for Solvency II reporting has absolutely no influence on the calculation of the SCR under the standard formula.

The danger is that the shock of how much reporting is required lets people forget that they still need to calculate the SCR. Simply copy-pasting data into an Excel sheet (even if it is the official QIS sheet - which might not survive) is not Solvency II compliant. Hence, we also need professional implementation of the standard formula.

The message is simple: If you have the best risk data warehouse and the slickest reporting set-up, but cannot deliver the output from the standard formula in an operationally safe and auditable way, then you are only half Solvency II compliant. This is to say: you are not compliant.

And if you can calculate the output of the standard formula in an operationally safe and auditable way, but have no risk data store as a basis for the many reporting requirements, then you are only half Solvency II compliant. This is to say: you are not compliant.

You need both and that's why we, together with some insurance companies, shape the first standard software solution for Solvency II - project Saphir.

--Markus St.