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IBM supporting preparations for Solvency II legislation with HSBC

HSBC using IBM Business Analytics technology to prepare insurance business for new European directive

LONDON, UK - 27 Apr 2011: IBM (NYSE:IBM) today announced it has signed a contract with HSBC Insurance UK to prepare the company for the upcoming European Solvency II legislation, which aims to strengthen protection for all insurance policyholders. IBM will assist HSBC in developing and implementing a business analytics solution that will provide advanced insight and analysis of the company's risk management data so that capital can be efficiently allocated to cover business risks.

Solvency II is the European Union regulatory directive requiring insurance firms to implement economic risk management standards by 31 December 2012. The objective of Solvency II is to ensure that insurers fully understand the risks inherent in their business and allocate sufficient capital to cover those risks. Insurance providers may agree with their regulator to use a standard formula or create their own full or partial internal model to satisfy the new capital adequacy requirements.

IBM is supporting HSBC to create a data management and analytics model to ensure compliance with Solvency II requirements and deliver advanced risk management capabilities. The solution will provide a store for HSBC’s risk and solvency modelling data and will permit HSBC to demonstrate quality, availability and traceability of all key regulatory data and associated reporting.

"Managing risk is one of the most important missions of a financial institution.” said John Smith, Insurance Business Solutions Partner, IBM Global Business Services, UK & Ireland. “Working with HSBC, IBM is creating a system that will provide the most stringent safeguards for the insurer, its shareholders and customers."

In order to comply with Solvency II, companies need to demonstrate that they have strong internal governance and reporting mechanisms. The new database will support HSBC in this by producing both fact-based insight and secure evidence of risk and solvency related decisions. The solution will utilise IBM business analytics software as the analytic reporting solution between the new database and system users. This software will enable users to view modelled results data, adapt and enrich reports to meet their needs and distribute them as required. The solution will allow HSBC to demonstrate strong control around this reporting domain, including full audit trail, approval/rejection and controlled manual adjustments.

Stephen Coombes, Chief Finance Officer, HSBC Insurance UK, said: “Preparation for Solvency II is critical for our business and demands specialist expertise – we are pleased to be working with IBM on this vital activity.”

This Business Analytics solution is powered by IBM Cognos® 8 Business Intelligence. IBM has invested more than $14 billion in acquisitions to build an analytics portfolio which includes more than 24 acquisitions. In addition, IBM has assembled 8,000 analytics consultants with industry expertise, and opened a network of seven analytics centres of excellence.

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Contact(s) information

Kate McElwee
IBM External Relations
+44 (0) 7725 201076
kate.mcelwee@uk.ibm.com

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