Teradata Solvency II Solution Enables Compliance and Enterprise Intelligence

Published on Wednesday, 27 June 2012 22:32 Written by TradersHuddle Staff

New solution allows insurers to end struggle with chaotic, complex finance and risk architectures

SAN DIEGO, June 27, 2012 /PRNewswire/ -- Teradata (NYSE: TDC), the leading analytic data solutions company, today announced the immediate availability of the Teradata Solvency II solution, which enables insurers and reinsurers doing business in Europe to swiftly respond to evolving and maturing Solvency II regulatory risk requirements. The Teradata Solvency II solution is a comprehensive portfolio of breakthrough risk management data infrastructure, hardware, software, and services providing a foundation for enterprise intelligence that can empower insurers to make the best decisions possible. 

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"Solvency II is the most significant regulatory challenge in 15 years. Unfortunately, many companies are looking at Solvency II solely as a compliance issue," said John Burke, vice president, Teradata Corporation. "The market leaders have a vision that the deployment of new business processes and technology to reach compliance with the Solvency II regulations will also drive a new generation of business intelligence capability that will be a competitive game-changer. Insurers going for the compliance-only approach will be left behind. The Teradata Solvency II solution is unlike other solutions, because it enables insurers to ask any risk question, on any data, at any time, by any business user without imposing arbitrary data infrastructure limitations."

When faced with the fast-approaching deadlines for the Solvency II risk management compliance in 2013 and 2014, many insurers are struggling with chaotic, complex finance and risk data infrastructure, which has become a major barrier to success. Fundamental decisions about how insurers implement a wide range of essential data warehousing services are required. These areas include risk management, governance, data quality and management, regulatory compliance, capital management, understanding risks facing the entire company, and how best to support the business intelligence needs of decision makers.

"Many insurance professionals focus on the analytics, models, and reporting required by the Solvency II regulations, as opposed to the underlying analytical data infrastructure," said Sam Stuckal, research director, Life and Annuity Insurance for the TowerGroup. "On face value, these topics appear to be more interesting and timely than data infrastructure. However, the transition from Solvency I to Solvency II will drive a new industry-wide focus on ensuring the data inputs are valued as much as the models and outputs. Solvency II is principles-based, encouraging insurers to use Solvency II inputs, calculations, and outputs to drive business decision making. This is why data infrastructure should have equal value to analytics and reporting."

The Teradata Solvency II solution is a single, comprehensive, authoritative, and integrated risk data infrastructure for reporting and analytics. The solution includes the Teradata Insurance Industry Logical Data Model, Solvency II Data Catalogue, the Teradata Purpose-Built Platform Family, Teradata Database, Teradata Professional Services consulting, and best-of-breed partner solutions. The Solvency II solution has built-in accelerator capabilities, which enable insurers to rapidly deploy it in any environment with reduced project risk. In addition, the solution supports a view of the data lineage and enables auditability and traceability needed to respond to rigorous scrutiny by regulators.

The newly developed Solvency II Data Catalogue, the first in the industry, maps to the required data within the enterprise warehouse to support the risk data requirements of Solvency II. The catalogue provides a decomposition of the Solvency II technical specifications as defined by the European Insurance and Occupational Pensions Authority—and is mapped to the logical data model.

"Complexity is the killer," said Burke. "Those insurers that do not adopt a unified approach will suffer. Solvency II is all about the data – collecting, organizing, modeling, analyzing, and reporting. If the data are suspect and difficult to collect and organize, then the modeling, analyzing, and reporting are suspect. Making the wrong decision about Solvency II data infrastructure will have profound costs – literally doubling or tripling the ultimate project expenditures."

When insurers follow the Teradata Solvency II solution best-practice approach, they create numerous competitive advantages beyond a reduction in compliance costs. The solution enables risk officers, financial officers and chief information officers to achieve enhanced visibility into key business result drivers – both now and in the future – and the opportunity to reduce:

• reserves of regulatory capital that could be better spent on growth-related activities
• claim losses through better risk measurement and management

The Teradata Purpose-Built Platform Family, enterprise analytics, and partner solutions, enable firms of all sizes and complexities to build a data warehouse as the foundation to leverage customer, operations, financial and risk data for Solvency II. The timely access to relevant information and analytics provides business intelligence, which can dramatically improve business decision-making affecting retention, marketing, financial management, risk management, and ultimately solvency, which is a key objective of Solvency II. 

Relevant Links

• Implementing Solvency II–Compliance or Effective Risk Management whitepaper, Bill Broaddus, http://www.teradata.com/resources/white-papers/Implementing-Solvency-II-Compliance-or-Effective-Risk-Management-eb6103/?type=WPBroaddus
• European Insurance and Occupational Pensions Authority https://eiopa.europa.eu/activities/insurance/solvency-ii/index.html

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