The business case for insurers’ current investment in financial models is based on leveraging significant operational and commercial advantage post-implementation. How well are they doing? Many life insurers launched their Solvency II projects with great expectations, aiming to sharpen decision making and competitiveness. However, our research reveals that the business benefits may have to take a back seat to more pressing compliance demands.
While the companies we spoke to are set to spend more than €300 million on systems improvements for Solvency II, the amount of work still needed to meet the initial 2012 deadline has largely dampened expectations, forcing most to concentrate on basic compliance rather than business benefit.
With the failure to comply now seen as a real risk, project managers are insisting that the focus of implementation is narrowed down to the essentials. While there may still be business benefits, the more ambitious objectives will need to wait.