Insurers urged to modernise spreadsheet use for Solvency II

Spreadsheets continue to play a central role for insurers undertaking Solvency II processes, despite ongoing concerns over compliance and governance risks associated with their use.

According to data from the 8th Annual Solvency II Survey by LCP, spreadsheets are still relied upon for regulatory reporting and risk assessment across many insurance and reinsurance companies in the EU. However, this reliance brings challenges around transparency, auditability, and version control.

Compliance risks

Sebastian Dewhurst, Founder of EASA, a platform focused on securing spreadsheet operations, highlighted these risks and the choices insurers face. Dewhurst explained, "Excel is indispensable for actuaries and risk teams - but without safeguards, it can undermine transparency and compliance. Spreadsheets don't need to be scrapped; they need to be elevated. Insurers must retain modelling flexibility while ensuring the control and transparency regulators require."

He noted that regulators expect a clear audit trail and comprehensive version control, yet spreadsheets in their standard form lack the necessary functionality to meet these expectations. Dewhurst elaborated on typical risks, stating, "Spreadsheets remain a powerful and familiar tool for many finance teams. But when it comes to regulatory requirements like Solvency II, they have some limitations that can create compliance challenges.

For example, version control is difficult to manage. Multiple copies and manual updates can lead to confusion, increase the chance of outdated or incorrect data being used, and make it harder to track changes with confidence.

Access management is another area to consider. Without strong user permissions, sensitive financial information could be more widely shared than intended, raising the risk of data breaches.

There's also the question of audit trails. Regulators expect clear documentation of how data is handled and modified, yet spreadsheets don't always provide a complete or tamper-proof record.

Finally, while spreadsheets work well for many tasks, they can struggle in multi-user, fast-moving environments. Collaboration across teams becomes harder, and real-time updates are limited.

Taken together, these factors can increase exposure to human error, regulatory breaches, and potential fines - making it important to understand where spreadsheets work best and where more specialised tools may be needed."

The enduring role of spreadsheets

Despite these limitations, Dewhurst is clear that spreadsheets remain central to insurers' operations, especially for those dealing with complex financial modelling. He highlighted the impracticality of replacing spreadsheets with enterprise software across the board:

"Spreadsheets offer unmatched flexibility and customisation, especially for actuarial and risk teams who rely on them for complex modelling. Replacing them entirely with enterprise systems isn't always practical - those systems can be costly, rigid, and slow to adapt. The key is not to eliminate spreadsheets, but to use them to their fullest potential. That means pairing their modelling strengths with software that enhances governance, collaboration, and security. This way, insurers can retain the agility of spreadsheets while making them more user-friendly, controlled, and safe."

No-code technology

Dewhurst points to no-code platforms as a viable solution to bridge the gap between spreadsheet utility and regulatory requirements. These platforms enable insurers to convert their spreadsheet models into secure web applications with enhanced control and auditability.

"No-code platforms are emerging as a compelling solution for insurers seeking to bridge this gap," says Sebastian. He continued, "They allow finance and risk teams to convert their spreadsheet models into secure, cloud-based web applications with built-in compliance features such as automated version control and audit trails, role-based access controls, real-time data sharing and collaboration, and centralised, secure data storage. By leveraging no-code technology, insurers can maintain the agility and customisation of spreadsheets while dramatically reducing operational risk and improving regulatory compliance. This approach allows finance and risk functions to build and update tools rapidly, without relying heavily on IT or external consultants."

Modernising Solvency II compliance

Dewhurst believes that while spreadsheets are here to stay, they must be supported by technology that meets the demands of today's increasingly stringent regulatory landscape. He said, "Spreadsheets have been the workhorse of financial modelling for decades. The challenge now is ensuring they're supported by tools that add the controls, scalability, and transparency regulators expect. Modern no-code platforms provide that balance - allowing insurers to retain the speed and flexibility of spreadsheets, while making compliance more sustainable, auditable, and future-proof."

As the requirements for regulatory reporting and governance continue to evolve, the insurance industry faces ongoing challenges in balancing practical workflow needs with compliance obligations, prompting companies to seek out solutions that enable both security and operational flexibility.