HSBC Insurance UK has signed a contract with IBM to support its European Solvency II compliance initiative for all insurance policyholders.

IBM will assist HSBC in developing and implementing a business analytics solution that will provide advanced insight and analysis of the company’s risk management data so that capital can be efficiently allocated to cover business risks.

Solvency II is the European Union regulatory directive requiring insurance firms to implement economic risk management standards by 31 December 2012.

The objective of Solvency II is to ensure that insurers fully understand the risks inherent in their business and allocate sufficient capital to cover those risks.

IBM will be supporting HSBC to create a data management and analytics model to ensure compliance with Solvency II requirements and deliver advanced risk management capabilities.

IBM said its project will provide a store for HSBC’s risk and solvency modeling data and will permit the bank to demonstrate quality, availability and traceability of all key regulatory data and associated reporting.

The solution also enable users to view modeled results data, adapt and enrich reports to meet their needs and distribute them as required. It will include full audit trail, approval/rejection and controlled manual adjustments.