A company-wide understanding of the importance of data is the best way to ensure its quality, according to insurers.
Data managers, risk officers and actuaries discussed data governance at InsuranceERM's Data for ERM & Solvency II conference in London on 15 May.
Only a minority of the audience had a clear understanding of who within their organisation was responsible for the quality of the data they use. Often, it is the user of the data who has to take responsibility, but this can create problems if there are several users.
Roger Dix, chief risk officer for Wesleyan, said there is a growing need for a "chief data officer" role to oversee the production and use of data within an insurer. Ivo Roest, project manager for Solvency II and data quality for ING Insurance, said his firm has a data quality officer that sits alongside the chief financial officer.
But even if there is an individual with particular responsibility for data, speakers said the importance of data quality needs to be stressed throughout the organisation. In the future, ensuring data quality may well be linked to remuneration.
Regulators also are taking more of an interest in how data moves through the business. Dean Buckner, data specialist for the Prudential Regulation Authority, said the UK supervisor is talking to insurers about producing a "data flow chart" showing the sources of data for their capital models, how the data is manipulated, and the controls around the manipulations. Understanding data flow is crucial for effective capital management, he said.
Participants also discussed the challenges with meeting the pillar 3 reporting requirements of Solvency II.
Rizwan Sheriff, a vice president in MetLife's Europe, Middle East and Africa Controllers division, described pillar 3 as a "huge burden" and the firm's focus over the next two to three years will be implementing its pillar 3 project into business-as-usual.
Kate Forbes, group finance systems manager at Friends Life, said her firm will be conducting pillar 3 reporting "dry runs" later this year. While the UK insurer is working on an end-to-end reporting solution, some manually intensive "tactical" approaches would be needed in the meantime. Work with third-party data providers was being prioritised, she added.
Delegates also heard from the European Insurance and Occupational Pensions Authority (Eiopa) about how it will help firms deal with reporting in XBRL - the format for delivering Solvency II information to regulators. Version 1.4 of the architecture is due to be released next month and Eiopa will soon release its "tool for undertakings" that will assist insurers with creating XBRL reports.
