Solvency II: Overview and Impact on IT
Insurers willing to take advantage of the challenges posed by Solvency II should focus on aligning their IT architecture, treating data as a strategic asset, enabling advanced IT risk management tools, and promoting frictionless communication.
In a new report, , Celent reviews the drivers of change influencing the international insurance industry and regulation. The report describes the updated set of regulatory requirements for insurance firms operating within the EU known as Solvency II and examines the likely consequences for insurers.
Overall, Celent estimates that European insurance companies allocate between €700 million and €900 million for new IT projects in order to comply with Solvency II. European insurers currently spend 4%, on average, of their IT budget on compliance. €In addition, they typically spend 40% of their IT budget on new projects and an estimated 7% of that on compliance projects. With the implementation phase of Solvency II approaching the effective date, Celent believes that insurance companies will allocate more money for new IT projects in the fields of compliance and control. The IT budget for these new projects will continue to grow in the next three to four years.
"Solvency II could trigger a wave of new investments," notes Nicolas Michellod, senior analyst with Celent’s insurance group and author of the report. "Insurers willing to take advantage of the challenges posed by Solvency II should launch new initiatives in conformity with the Celent Technology Foundations of Advantage."
This report explores the impact Solvency II will have on European insurers’ IT spending as well as potential IT initiatives resulting from its implementation.
The 26 page report contains 14 figures and two tables. A table of contents is available online.Members of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact email@example.com for more information.