Choosing not to adopt the tripartite data exchange table for asset data reporting requirements under Solvency II would be "narrow and short-sighted", according to a report by Silverfinch.
The asset data management firm surveyed insurers, asset managers and regulators across Europe for its paper, The European race to the Solvency II finish line, and found that the popularity of bilateral agreements between insurers and asset managers for bespoke asset data could come at a cost to insurers further down the line.
"It's quite obvious that a plethora of separate agreements, and separate data models, between various insurers and asset managers will add greatly to the cost of the transfer of data in the long run," the report said. "That cost will not in the end be borne by the asset management industry but will eventually be passed on to the insurers, and consequently their policyholders."
Established by investment associations in the UK, France and Germany, the tripartite data exchange table provides a free standard template for data exchange in relation to asset funds, with the aim of simplifying pillar 3 reporting under Solvency II (InsuranceERM, 16 September 2014, EU associations set template for Solvency II data exchange).
Version 3.0 of the tripartite template was released on 13 October and can be found on the UK's Investment Association website.
The report states that the template "has essentially been rejected by the insurance industry in Belgium" and Silverfinch's research indicated a lack of interest in Spain and Italy, while uptake in Germany has been patchy. French and UK insurers have shown greater interest.
"[The template] is an asset managers' initiative to try and streamline their processes and make their life a little bit easier under Solvency II, but it has taken a little while for that to filter through to the insurance community," said Silverfinch's Ashley Smith.
"The report suggests that as well as making the reporting process smooth for insurers, the tripartite template must also be easier for asset managers to respond. Standardised data capture ensures a more time-efficient reporting process, whereas a bespoke reporting format by an insurer makes it more difficult to capture the right data within the required timeframe."
