MoneyMate’s introduction of a look-through and reporting utility, which will provide data connectivity between insurance companies, asset managers and third party administrators, is aimed to support insurers that must comply with Solvency II and asset managers that want to protect the investment strategies they are using while providing necessary holdings data to insurers and their third party administrators.
MoneyMate’s so-called Fund Price and Information Exchange (PIE) utility is a centralised repository that normalises and stores holdings data before enabling asset managers to provide the data to insurance investors in a permissioned and controlled environment. This will meet insurers’ needs under the Solvency II directive to develop look-through transparency into their investments and provides the foundation data that is a starting point on which to build Solvency II compliant solutions using services from data vendors that add reference data and ratings to calculate required market and default risk measurements and provide quantitative reporting templates.
While Solvency II increases the reporting burden for asset managers, some compensation will be provided by the MoneyMate utility as it allows asset managers to identify insurance investors requiring access to their data and, in turn, allows them to identify which insurance investors are in funds with high capital ratio requirements and actively engage with insurers to offer them funds with lower capital requirements.
MoneyMate chief technology officer Ronan Brennan, explains: “The utility provides an industry connected infrastructure and tackles the fundamental challenges for asset managers, third party administrators and their insurance clients under Solvency II: data ownership; opaque investment structures; and security for intellectual property. The utility connects the regulated investor, its asset manager and its service providers. A landscape altering regulatory move like Solvency II requires a new model and that’s what we have built at MoneyMate.”
John Dowdall, global business development manager at MoneyMate, suggests the company is the only supplier to provide the process the industry needs to address the issue of sensitivity of holdings data and the concerns asset managers have about the release of their intellectual property and investment strategies as required by Solvency II.
He says: “We don’t seek ownership of the data, ownership remains with the asset manager or fund. And data is not licensed. Instead, it is permissioned by asset managers to insurance companies and third party administrators. Asset managers that take a strategic view and want to protect assets under management and target new mandates from insurers can list on the utility to identify themselves as willing to be Solvency II transparent to their largest investors. They are charged on a fund per annum basis to list funds. The utility provides reporting to insurance investors and their third party administrators in a permissioned, controlled environment. In return, the asset manager receives transparency of who the investor is, which is not always available as investments can come through other funds or platforms. This enables asset managers to engage with insurers.”
With Solvency II due to come into force in January 2014, the deadline for insurance firms is closing in. While they prove their internal models to local regulators during 2013 they will also be analysing their investment strategies. It is during this period that asset managers need to position themselves to retain existing assets under management and target new mandates. To support this, the MoneyMate utility is working on Solvency II roadmaps with organisations that are involved in the regulation and will deliver holdings data during 2013 to facilitate access to data that insurers require.
Dowdall concludes: “The utility is designed to help each member of the funds industry to provide what is required for insurers to comply with Solvency II and to support asset managers in providing transparency on insurers’ investments in the right manner. It is important that the industry works to ensure the right processes are put in place from the start as, without them, there is a rise that asset managers could lose assets invested in funds.”