Insurance Industry Must Take Data Governance Seriously

Leading accountant and insurance industry adviser Moore Stephens has questioned whether data governance is being accorded the attention it deserves by the insurance industry.

Recent FSA Arrow visits have highlighted a number of frequently recurring problems in insurance firms relating to risk management, governance, data and reporting. These include poor risk control culture, poor reporting, ineffective governance, inadequate allocation of control staff, lack of integration across controls and risks, and poor formalisation of roles and accountability.

Moore Stephens Director Charles Portsmouth says, “Data is the lifeblood of any organisation. It feeds everything a company does. It informs the overall decision-making process and is a vital part of risk management. The proper use and application of complete and accurate data is a central part of the overall Solvency II regime. But is data governance being accorded the importance it merits in the insurance industry?”

Writing in the latest issue of the firm’s Insured Interest newsletter, Portsmouth says, “The FSA requires firms to have a proper data policy in place, and it calls for proper board engagement. Data, and the risks associated with it, should form an integral part of a board’s established risk reporting, and not merely constitute a moveable item on the board agenda influenced by technology-related developments within the firm. Improved management of data to feed reporting systems, and greater board engagement, are vital ingredients for better information relating to management, risk and general business conduct.

“Simply writing a data policy is not enough, in itself. Proper data management is essential, and the data must be accurate, complete and appropriate. Data policies, meanwhile, should facilitate the identification and control of the risks associated with data. Poor information can lead to poor data quality, and vice versa. What is needed is a robust data model, linked to core risk factors in order to produce meaningful management and regulatory information.”
 

Source: Moore Stephens