The current financial crisis has placed a greater emphasis on the need for insurance companies to implement an enterprise risk management strategy. As a result, rating agencies, such as S&P, Moody's, and A.M. Best, are recommending insurers implement an enterprise risk approach to ensure an excellent rating standard. SAS plans to help insurers address these risk needs with the latest release of SAS Insurance Intelligence Architecture. The architecture is an updated insurance data model to support risk analysis and risk-based capital calculations.
"The basic concept of insurance is risk, but very few insurance companies have an enterprise risk management strategy," says Nicolas Michellod, a senior analyst in Celent's insurance practice. "Solvency II and the recent financial crisis have highlighted the need for insurance companies to implement risk management solutions. Essential to the success of these systems are initiatives around data, and therefore, implementing an enterprise data management platform is certainly a key element."
Additionally, Solvency II is beginning to loom large for European insurers. Insurance companies can learn a lot from the challenges banks faced addressing Basel II compliance. One of the biggest issues was the volume, consistency, and quality of available data to perform the risk model calculations. Those organizations that initiate an enterprise data management platform will be better prepared for the Solvency II legislation and ultimately the benefits gained from risk management.
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