Interactive Data has launched a new Solvency II service, building on its pricing and reference data for thinly traded instruments.
The service is intended to help insurers and asset managers identify the less well-known market risk in investment instruments by providing them with more granular information on their investments and on the entities issuing the assets.
Nicolas Michellod, senior analyst at Celent, said: Addressing Solvency II remains one of the most important preoccupations of European insurers. They need to not only evaluate how they can leverage existing IT infrastructures, but also to find the right balance between their internal IT applications and specific technology offerings from expert providers to meet qualitative and quantitative reporting requirements. This is particularly true when examining the data management requirements that are extremely complex due to the sheer quantity and quality of data that is required to identify, manage and monitor the various risk categories.The data available within Interactive Datas Solvency II Service can enable firms to calculate the market and default risk measurements demanded under the Solvency II Pillar 1 Minimum Capital Requirements (MCR) and Solvency Capital Requirements (SCR). It also provides the additional asset data required for the Quantitative Reporting Templates (QRTs) under Pillar 3.
The service includes the following codes: a corporate instrument code, which in turn includes the spread risk for credit instruments; a NACE code, which is the first time this has been mandated for company classification; and a new element dealing with legal entity identifiers (LEIs), which will be the new measure as mandated by the regulator – of a companys exposure to an organization or instrument.
Regulators and the industry are working on a framework for LEIs with recommendations due to be made in November and implemented in March next year. The identifiers have gained traction globally, with the US insurance authority mandating their use this week.
Awareness of Solvency II among asset managers and insurers is high, says Interactive Datas Bob Cumberbatch. With the date for implementation now more likely to be Jan. 1 2014, instead of Jan. 1 2013, fund managers and insurers will have an incentive to calculate and report their investments earlier as doing so will mean they will need less regulatory capital under the new framework.
(JDC)