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The Actuary The magazine of the Institute & Faculty of Actuaries

Unum teams with IBM for Solvency II task

Financial protection insurer Unum has reached an agreement with IBM to use its OpenPages software to improve management of operational risk and to support the requirements ahead of Solvency II.

IBM said that the software provides the insurer with enhanced insight and control of risk data, enabling a smarter allocation of capital. It also enables Unum to eliminate risk management silos across the organisation, allowing for increased efficiencies and improved decision-making.

The firm said that insurance risk management has typically focused on insurance liability, based on known risks and associated historical data. But while this historical data is critical to the aggressive pricing of certain products such as life insurance, this approach is not appropriate for quantifying internal operational risks, such as malpractice or internal system failure.

IBM believes that few organisations have an integrated approach to measuring their operational risk as outlined in Solvency II.

"We need to ensure we meet regulatory requirements," said Kevin Borrett, UK head of risk at Unum. "We searched for an integrated solution that helps us better understand and proactively manage the risks that can impact our business, both at the corporate and divisional levels. IBM OpenPages offers a true holistic view of risk within our organisation and helps to embed risk management and governance into our overall corporate culture."