Solvency II data management and reporting tools (SCR calculation, QRTs), ORSA definition and project management, MCEV, valuations for mergers and acquisitions. These are the most common services in this area where we support our clients.
These services are often supported by our tools which we have developed. For further information click here.
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 IT.
Please read more about our solution here:
Please watch a short video demonstration of our Standar Formula Calculator:
Solvency II 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 a 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.
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 the 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.
Market Consistent Embedded Value
Reporting insurance results under Market Consistent Embedded Value basis appears to be far the most appreciated standard by the investor community. Production of the MCEV numbers is, however, a very demanding task, which requires huge resources. We can help our clients with setting up MCEV methodologies, building up the actuarial models, calculation of the required figures, and preparation of the disclosures, such as sensitivities, analyses of earnings, or new business value.
Mergers and acquisitions
Our senior team members participated in a number of merger and acquisition projects under different jurisdictions in both EU and non-EU countries. We typically worked in the role of an actuary with responsibility for adequacy testing of the reported liabilities or for valuation of the target company, usually on the Embedded Value basis. We are ready to support our clients in a similar role at any time.