This EU framework regulates the EU insurance sector pertaining to the solvency capital requirement (SCR); the amount of capital that insurance firms must hold as protection to reduce the risk of insolvency, up to the statistical level of a 1-in-200 year event (a 99.5% confidence they can cope with the worst kinds of losses over a year)). And the minimum capital requirement (MCR), below which policy holders are exposed to unacceptable risk.

Currently, climate change, sustainability, covid-19 resiliency and post pandemic shocks are some themes that are growing as concerns that can have an outsized impact on assets, portfolios and balance sheet liabilities. Proposals are currently being considered to build in further risk mitigations, compliance monitoring, audit/governance, penalties on brown assets (that pollute or are not sustainable) etc. by reforming Solvency II.

With Billions of dollars under asset management at various insurance firms; monitoring or attributing climate temperature rise (in fractions of a degree) against the insured assets, could result in non-compliance costs/penalties that are substantial, including denial, suspension or revocation of insurance licenses, cancelled investor distributions. Or even force sanctions on insurance holding companies.

Use Cases

Business Problem

The pandemic has put additional strains on all individuals and businesses, such as high unemployment, risks to essential workers, number of bankruptcies, supply chain issues and overall economic damage.  Insurance firms are no exception to these challenges, but they also have the additional challenge of tracking how all of this is impacting their products and tracking and managing the necessary capital and protections required to reduce the risks of insolvency and customer portfolio management.

The Solution

Orion EIIG tracks metadata as it exists, changes to metadata over time. It supports your Data Lineage and Data Governance needs from a traceability and segregation of duties needs.. It also supports your centralized analytics and dashboarding activities are accurate and provides the traceability to ensure that risks are mitigated. EIIG also supports data reconciliation efforts and data quality checks by an auditor.

Business Benefits

In the ideal insurance world, Actuaries should have accurate dashboards that show levels of risk and capital to buffer the firm when a material change happens for individuals, organizations (such as loyalty, churn etc.) and other assets managed in their portfolio..