Solvency II Directive

Orion Governance Use Case

Confidence Despite Uncertain Times

Insurance companies continue to cope with the pandemic’s impact on business and data. They depend on trustworthy software.

Our data governance experts understand that insurance companies work hard to avoid compliance issues.

Orion’s automation enables access to data that organizations need to achieve their business goals.

Orion Governance support is available to help clients whenever they need it.

Orion Governance Understands EU Insurance Regulations

The Solvency II Directive framework regulates the EU insurance sector and focuses primarily on reducing the risk of insolvency. The solvency capital requirement (SCR) specifies the minimum amount of capital that insurance firms must hold. That number is determined statistically as a probability of not surviving a 1-in-200-year event.

Expressed in a different way, the requirement represents a 99.5% level of confidence that a company can cope with the worst kind of loss. Falling below the minimum capital requirement (MCR) means a company is exposing policyholders to unacceptable risk, a situation that requires immediate mitigation. Ignoring this warning could result in the suspension of an insurer’s operating authority.

Climate change, sustainability, COVID-19 resiliency, and post-pandemic shocks are growing concerns that can seriously impact assets, portfolios, and balance sheet liabilities. The EU is currently reviewing proposals to strengthen Solvency II by reforming compliance monitoring, auditing, governance, and penalties on brown assets (that pollute or are not sustainable).

Insurance firms with assets worth billions under management monitor and attribute climate temperature increases against those assets. Such changes could result in substantial non-compliance costs and penalties. These may include the denial, suspension, or revocation of operating licenses or canceled investor distributions. Insurance holding companies may be sanctioned as well.

Orion Governance is Key to Solvency II Directive Compliance

Business Problem

The pandemic put enormous strain on individuals and businesses. Overall economic damage included high unemployment, risks to essential workers, bankruptcies, and supply chain issues. Insurance firms are not exempt from these challenges and have additional burdens that are specific to their industry. For example, insurers need to track the impacts on their products while managing capital requirements associated with insolvency risk. At the same time, managing their customer portfolio requires special attention.

The Orion Governance Solution

Orion EIIG tracks changes to enterprise metadata over time. It supports your data lineage and data governance needs by providing, among other things, end-to-end traceability, and segregation of duties. It also ensures that your centralized analytics and dashboarding activities are accurate. Real-time data observability mitigates risk. As well, EIIG helps auditors to reconcile data and to verify data quality.

Business Benefits with Orion Governance

Actuaries must have accurate dashboards that display risk and capital levels that buffer the firm when material changes occur for individuals, client organizations (loyalty, churn, etc.), and other assets managed in the portfolio.

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