Asset managers with insurance mandates ‘lulled into false sense of security’, says Citisoft

London - 7 January 2015

Citisoft, a leading global investment management consulting firm, has launched a facility for asset managers deliberating how to meet the pressing ‘Pillar III’ data delivery expectations of Solvency II.

Due to come into effect on 1 January 2016, Solvency II aims to implement solvency requirements that reflect the true risks that companies face and deliver a consistent supervisory system. This EU regulation places immense data creation and data management burdens on insurance firms. Citisoft believes that this seemingly distant date has lulled some asset managers with insurance mandates into a false sense of security. Data sets need to be available from early 2015, whilst normal implementation processes such as SLAs and testing must be completed during 2015.

“Time is now of the utmost essence for asset managers that have not decided how to tackle Solvency II. At the very least they should take advantage of the pool of knowledge available to clarify strategy, project needs, timeframes and implementation,” says Cosmo Wisniewski, Director, Citisoft.

Citisoft’s offering enables asset management firms to understand the end-to-end regulatory requirements and the associated data impacts. The service considers how and where the costs for asset managers can be minimised when looking at their relationships with insurance firms. Firms will be empowered by Citisoft’s cumulative knowledge of how other asset managers have responded to the regulation, including where they have ‘pushed back’ on their insurance clients’ data requests.

Citisoft is also helping asset management firms to understand the products and options available for implementation, providing the confidence to move forward quickly and efficiently. Citisoft has recently spent a lot of time working with the firms that have become successful as a result of Solvency II, and understands where best to deploy these solutions. The firm’s consultants have been assisting insurance-based product vendors in considering their path into the asset management world and this experience has resulted in the development of some innovative approaches.

“We have some interesting options for those asset managers that have an almost totally outsourced operating model and are struggling with Solvency II, as well as post-trade compliance, internal reporting, monitoring third party administrators, and so on,” says Wisniewski.

Citisoft will aid with the internal communication struggles that occur within asset management firms and assist with the placement of internal responsibilities in the various departments.

“We’re finding that a lot of Client Services and Client Reporting teams are being ‘given’ the problem to solve, simply because it may at first appear that a Client Reporting function is the best location from which to retrieve the data that is required,” explains Wisniewski. “We can quickly establish where to get the best return on your Solvency II investment - whether you have in-house systems, outsourced operations, a data warehouse, or a hybrid.”

Finally, for those asset management firms that have already spent time and money on Solvency II solutions, Citisoft can provide an impartial review of the impact of these existing solutions, benchmarking the future risks against some strategies that have emerged more recently and may still be worth considering.

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