TPTConnect has recently completed a survey of asset managers, insurers and service providers within the area of fund look-through data provision and collection, as well as the overall technical and business related aspects that are being addressed by both the asset management and insurance industries. The survey has formed the basis for our findings, but we have also subsequently obtained additional insight in our role as a Solvency II fund data exchange platform.
 
 
Preparedness of asset managers
 
At the end of January 2016, only 60% of the asset managers who answered the survey, started to deliver Solvency II data. The number has increased as the deadline looms, but many asset managers had not necessarily seen the provision of data as a top priority unless they had extensive insurance business. In addition, there was also a tendency to view the extensive list of up to 130 data fields to be a major challenge and did not realize that not all of the data fields were required for all types of funds. In addition, in certain regions, they were faced with multiple templates, as not all countries had adopted the TPT template in cases where commercial players created their own templates.
 
 
Challenges for insurers
 
Poor Coverage
Collecting look-through fund data has just been a small piece of the puzzle, but an important element, as part of a very comprehensive Solvency II project for insurers. Because of the challenges faced and business decisions that asset managers have made surrounding the preparation of the reporting, there is in many cases sporadic coverage for the insurers.  Because of the different levels of preparedness on the part of the asset managers, the collection process has been a touch and go affair, which requires extensive resources and follow up on the part of the insurers.
 
NDA requirements and processes
Many asset managers require an NDA in connection with the delivery of Solvency II reports. The insurers have been faced with either accepting delayed reporting or to enter a variety of proprietary and unique NDAs with differing terms and conditions. Not only is the approval process for NDAs time consuming for legal and business departments, the varying conditions of the separate NDAs present a corporate governance challenge. Some insurers have addressed the challenge by operating with an industry standard NDA which applies to each asset manager.
 
Non-uniform delivery formats and protocols
Insurers have also experienced that different asset managers deliver the reports in the TPT (in some cases different versions) or other templates, in a variety of formats, including Excel, CSV and FundsXML via a variety of delivery protocols. Some insurers are receiving the reports via email, and the asset managers want to deliver via a secure protocol, such as password protected web services. This makes for a challenging data integration process and inhibits the use of STP solutions, which eliminate risk.
 
Fund of Funds look-through data
When the insurer has invested in funds that invest in other funds, the collection process and aggregation process becomes more extensive. 
 
 
TPTConnect is unit of FundConnect A/S. FundConnect has performed portfolio collection and look through services for over 15 years and performed Capital Requirement services for over 5 years. If you would like to hear more about how we are helping the industry address any of the challenges within the fund look-through collection space please let us know at [email protected].
 
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