The Solvency II regulatory framework calls for a change in behaviour of insurers and for a new attitude to risk management. Compliance with Solvency II requirements may have a strong influence on the basic operations of an insurance company, starting from the management system, organizational structure or process adjustments, and ending with product definition, reinsurance set-up or asset management.
In response to this development and in order to better serve our clients’ needs we have created a comprehensive but scalable Solvency II solution, which can be sub-divided to the following building blocks:
- Solvency II data (data model, management, quality standards)
- Actuarial and reporting tools (SCR calculation, QRTs)
- ORSA (organization setup, risk metrics, capital projection)
- Project management (specialist project management professionals)
Explicit definitions of solvency calculations and supervisory reporting combined with demands to data quality and auditability are a vast challenge for the IT.
Please read more about our complex solution here.
Please watch a short video demonstration of our Standard Formula Calculator:
We have developed also several other specialized tools for Solvency purposes, For further information click here.
Typical areas of Solvency II support include:
- Standard formula calculator including complex solution for all 3 pillars (see below SCR calculator / QRT reports description)
- Data models ready and documented (see below Data model description)
- Data flow audit safeguarded
- Complex but modular ORSA advisory (see below ORSA definition description)
- Risk identification and risk limits definition
- PMO, Validation and Documentation
- Optimization (Capital, Profit, Reinsurance)
- Outsourcing of Key functions
- Advanced internal risk modeling
- Implementation of actuarial models or enhancement of existing solution
- Reporting (not only QRTs)
Further description of selected Solvency II services:
DATA MODEL
To get input information for Solvency II calculations, data from various legacy systems and often also some manual inputs need to be collected. This is time consuming, might not be transparent and traceable so that poses significant risk of errors. Our Solvency II data model defines the required structures for Solvency II calculations whilst the data storage capacity (Solvency II and Risk datamart) integrates data from various sources to a single place. It can be implemented from the scratch or as an extension of existing data solutions, which are not yet ready for Solvency II. In building the data storage we handle all automatic inputs by ETL (Extract & Transformation & Load) processes and monitor them for data quality. This holds true also for manual data, which should follow strict rules and workflow. This solution improves the transparency of the Solvency II reporting process and represents a significant contribution to meeting any data quality requirements.
SCR CALCULATOR / QRT REPORTS
The Standard Formula Calculator assembles the economic balance sheet and computes the own funds on the one hand, on the other it computes values for all risks required by the standard formula thus completing solvency capital requirements. Minimum capital requirements and resulting solvency ratios are also evaluated. Inputs have a level of granularity that keeps all computations traceable and consistent within the calculator. Outputs are defined in a manner that is compliant with QRT reports.
ORSA DEFINITION
Although this may seem to be only a regulatory burden, Own Risk and Solvency Assessment (ORSA), is much more than pure compliance. It is about implementation of the ideas of Solvency II to the everyday business, transforming the management of the business to risk based principles and about ability of proving that. We can support our clients in many areas related to ORSA: definition or review of the risk strategy, identification and monitoring of risks, definition of the risk appetite and limits, capital and performance metrics, risk-based business planning and in production of the ORSA report. Using our technical tools or technical experts we can obviously also support a number of calculation tasks within the ORSA process.
For further information about Solvency II, see also our useful links.
Please contact us for further information!