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This need will apply not only to market participants domiciled within the European Union, but also to multinational insurance firms that have operations in that particular region, according to PropertyCasualty360.
Fulfilling the requirements of the regulatory regime will compel these insurers to utilise a specific methodology for reporting and accounting, and this will not be possible without the right IT infrastructure, the media outlet reports. A wide range of firms lack the resources to consolidate their needs into one enterprise solution, and will therefore need to build upon their current hardware and software.
Even though many insurers have expanded their IT infrastructure to the point where they are capable of conducting reasonably sophisticated analysis related to risk and capital, these firms are encountering challenges aggregating a substantially higher volume of fragmented data, according to the news source.
These insurers may have a longer timeline in which to prepare themselves for Solvency II, as it was recently predicted by law firm Legal & General that the current adoption deadline of January 1 2014, could be postponed as lawmakers finalise the regulations.