Alternative managers wary of providing data under Solvency II

Data managementA number of alternative fund managers and underlying managers to fund-of-funds providers may be reluctant to provide data that insurance companies need under Solvency II regulations.

Fund managers expressed concern that there is a potential for strategic positions being “leaked”, according to a State Street survey.

A hundred insurance executives and fund managers were asked about levels of preparedness for data provision under the Solvency II regulations, which come into force in the EU next year and are primarily concerned with the capital insurers hold as a buffer against insolvency.

Some 31% believed that alternative fund managers will be “very reluctant” to share important and commercial data with insurers under Solvency II for this reason, and a further 56% think they will be “slightly reluctant”.

Some 65% believed funds-of-funds could be adversely affected by Solvency II because many of their underlying managers could be reluctant to share proprietary data.

However, the higher capital charge insurers will have to pay under Solvency II means 10% of insurance executives and fund managers in the survey felt insurers would dramatically reduce their exposure to alternative investments.

The survey also found that more than one in three insurance professionals and fund managers felt asset management companies were unprepared for providing the level of detailed data their insurance clients will require.

Martha Whitman, head of insurance solutions for Europe, Middle East & Africa at State Street says, “When our clients think of Solvency II they focus on the issues facing insurers, but the challenges can be just as demanding for the fund managers who manage their investments. The level of reporting and transparency required is significant.”

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