eFrame® for Insurance Solvency II Standard Formula

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When implementing the Solvency II Standard Formula, insurers are finding that calculating their Solvency and Minimum Capital Requirements (SCR and MCR), and Risk Margin is not simple.

Business Benefits

With eFrame® for Insurance Solvency II Standard Formula, insurers can smooth the flow and ensure the governance of data for solo and group reporting. With its taxonomy driven data model, every data point necessary to complete the quantitative reporting templates (QRTs) is identified and can be mapped within the organization, bringing confidence that the regulatory submissions and business intelligence derived from them will be dependable.

For more information please visit: http://www.secondfloor.com/solution/eframe-for-insurance-solvency-ii-standard-formula

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eFrame® for Insurance Solvency II Standard Formula

  1. 1. eFrame®for Insurance Solvency IIStandard FormulaAutomated, repeatable reporting for Solvency IIStandard Formula www.secondfloor.com
  2. 2. eFrame®for Insurance Solvency IIStandard FormulaAutomated, repeatable reporting for Solvency IIStandard Formula
  3. 3. Benefits of choosing the Standard formula standard formula implementation challenges Many insurers have chosen to use However, when it comes tothe Standard Formula for Solvency II reporting, implementation, many organisations find thatbelieving – rightly – that it is simpler and quicker the standard formula is not as simple as it mightthan building an Internal Model and seeking seem. Setting up the reporting process revealsregulatory approval for it. a number of technical and business challenges, such as:The standard formula sets out the required dataand economic capital calculations for common • Data collection – the data needed torisk types, and disclosure is via a standard report perform the calculations and populateformat. For less complex businesses, it’s a less the final report is fragmented across theonerous approach – and any resulting increase business, making it difficult to collect,in capital requirement can often be offset against validate and reconcilethe relatively low cost of implementing the • Missing data – many insurers find thatstandard formula. Insurers adopting the internal certain data required by the regulator ismodel approach might also implement the missing altogether, or at least not availablestandard formula for comparison purposes. in a machine-readable format. • Inconsistency – in larger firms particularly, data is categorised in different ways and given different labels in different parts of the business, with no standard definitions for key terms • IT costs – the cost of implementing some technology solutions, such as a firm-wide data warehouse or GRC application suite, can be significant • Manual effort – a huge amount of time and effort can be spent in locating, collecting, validating and reconciling the relevant data, taking valuable resources away from the business • Process bottlenecks – when data for Solvency II is being collected, calculated or reconciled manually, there is s a risk of bottlenecks occurring if one part of the process is held up • Repeatability – the production of a standard formula report tends to be a manual effort, with no automated process for ensuring it’s done the same way every time • Time constraints – producing a standard formula report manually can take weeks of effort, making it hard to meet Solvency II reporting deadlines (typically 3-4 weeks after quarter end) • Lack of trust – when there’s no standardised process underpinning the creation of the report, senior management are less likely to trust it as an internal tool for risk management
  4. 4. An automated, repeatable • Taxonomy-driven data modelling – creates a data model with standard, firm-wide and auditable solution for definitions and classifications for every data standard formula reporting point required for the quantitative reporting templates (QRTs)eFrame® for Insurance Solvency II StandardFormula is a solution that orchestrates the • Workflow – sets up responsibilities andcollection of data and calculations for Solvency II a process flow for supplying and validatingreporting, introduces governance and workflow data for standard formula reports. Email alertsto ensure accurate reports are produced on time, and escalations ensure data is supplied andand provides a full audit trail for all aspects of validated in a timely waythe report production. • Solvency II templates – uses pre-builtUsing the solution, insurers can accelerate templates to accelerate standard formula setupSolvency II implementations and embed and report submission, including a ready-madestandard formula reporting as an efficient, environment for Risk QRT reporting andcontrolled process at solo and group levels. the QIS model • Integration with existing systems –Features imports data automatically from finance,The solution is highly configurable and modelling, risk and compliance applications,tailored to reflect the specific processes, including spreadsheetsorganisational structure and lines of business of • Time Window-Driven Reporting™ –an organisation. It can handle multiple reporting one click in eFrame® triggers the processenvironments and has built-in workflow and to generate a complete standard formulagovernance to orchestrate the reporting of Life, report within a specified timeframe (typicallyP&C, Market, Credit and Operational risks for 3-4 weeks after quarter end)Solvency II and internal risk management. • Full audit trail – preserves a record of • Enterprise visualisation – discovers every action taken to create a report, every and maps the processes, organisational calculation made in the production of the hierarchies, systems and data sources inherent figures, and every source system supplying in an organisation today, to provide a start the underlying data point for Solvency II programme planning Capital calculation Consolidation, Solvency II Balance Sheet SCR / MCR Calculators ESG Actuals vs Appetite Scenarios/ Risk factors Capital Solvency II parameters eFrame® Liquidity Narratives For Insurance Reporting Solvency II Data Standard Formula ORSA Premiums, Claims, Expenses QRT Assets TIME WINDOW DRIVEN REPORTING PROCESS CONTROL & AUDITABILITY RSR / SFCR Operational losses Financial data eFrame® works with Data Calculators a firm’s existing Cash Flows & RP MCEV systems to create a DFA repeatable, auditable process for standard formula reporting
  5. 5. BenefitseFrame® for Insurance Solvency II Standard Key featuresFormula is an elegant solution to Solvency IIreporting challenges. • Automation and workflowCreating an automated process for standard • Data governance and validationformula reporting delivers significant business • Audit trailbenefits for large and small insurers alike: • Manage complex reporting demands – by establishing a dependable reporting process that works across multiple reporting cycles, reporting approaches, business hierarchies, geographies and supervisory jurisdictions Key benefits • Meet challenging reporting deadlines • Reporting deadlines met, everytime – SecondFloor’s Time Window-Driven • Efficient compliance Reporting™ methodology ensures standard formula reports are completed, validated and • Trusted reports submitted within the regulator’s deadlines • Reduce the cost and effort of compliance – by automating much of the data collection process and automatically prompting Implementation process individuals to fill any gaps, with guidance All eFrame® implementations can be carried on what data to provide out by experienced SecondFloor consultants • Ensure good governance – by creating on a fixed-price, fixed-date and fixed-content a standard, documented reporting process basis. Contact us on info@secondfloor.com for Solvency II Standard Formula, with a full to request a demonstration or to discuss your audit trail and traceability for every data point particular requirements. supplied and every action carried out in the production of the report Find out more • Improve internal risk management – by To learn more about how eFrame® can help creating trustworthy, auditable, repeatable you to standardise, automate and accelerate reports and risk intelligence that can be used your reporting processes, to guide internal decision-making about risk contact us on +31 (0)20 6589 700, appetite and risk mitigation email us at info@secondfloor.com,Chosen by leading insurers or visit our website at www.secondfloor.comeFrame® is being used for Solvency IIpreparation and reporting by some ofEurope’s leading multi-country insurers.
  6. 6. For more details please contactSecondFloor.About SecondFloorSecondFloor helps firms to complyand produce regulatory informationefficiently, consistently. Companiesthat turn to SecondFloor’ solutionsbenefit from timely, complete, accurate,traceable, auditable and repeatablereports and analytics. Facilitating stresstesting, economic capital calculations,and regulatory reporting in complexenvironments are key elements ofSecondFloor’s credentials that haveestablished it as a successful enablerof business analytics. eFrame®,SecondFloor’s software application,reflects best practice approaches andproject accelerators learned with clientsduring years of experience. SecondFlooris also an IBM risk analytics reseller.Request a full demonstrationWould you like to have a personalizeddemonstration of the eFrame® forInsurance Solvency II Standard Formula?Please contact us atinfo@secondfloor.com or simply visitwww.secondfloor.com

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