solvency ii: how to reduce the cost, burden and data quality risk … · 2018-01-02 · solvency....

Solvency II: How to reduce the cost, burden and data quality risk of regulatory reporting

Gideon BenariEditor and owner of

Solvency II Wireinfo@solvencyiiwire.com

Ed KennedyFinancial Services Market

Manager, EMEA, CoreFilingeak@corefiling.com

Colin HudsonSenior Sales Engineer,

CoreFilingcth@corefiling.com

Speakers

Simon DuttaMeeting Chair

QuestionsPlease type anyquestions you have here.

They will be answered at the end of the presentation.

Regulatory change landscape

Defining data quality & XBRL

Q&A

Defining cost burden &risks associated to regulatory reporting

Regulatory reporting process – QRTs

SFCR processes & attaining value from this data

Agenda

About Solvency II WireSolvency II Wire informs and influences the insurance industry:

5,300monthly visitors

1,300email subscriberswww.solvencyiiwire.com

happening in the development and implementation of Solvency II.“ ”Prof. Karel Van Hulle, former Head of Insurance & Pensions Unit, European Commission

63%46%of readers say that Solvency II Wire influences their business decisions

of readers say that Solvency II Wire offers information that they can’t find elsewhere

Very few information sources have been so close to what is really

About Solvency II Wire Data

Solvency II Wire Data is a simple and powerful tool for analysis of the Solvency II public disclosures across Europe.

3,300+Solvency II compliant insurers monitored for updates

1,800+ QRTs in the database

SCR coverage ratio distribution

0%

200%

400%

600%

800%

1000% c. 1700 solo insurers

Regulatory landscape

• Brexit

• Solvency II reviews 2018 & 2021

• Reporting & disclosures

Regulatory change – reporting

EIOPA V2.2 Solvency II XBRL Taxonomy

(For 2017 Q4 data)

Shortened reporting cycles by 2019:• Quarterly Reporting: from 8 to 5 weeks from quarter end

• Annual Reporting: from 20 to 14 weeks from year end

Solvency II regulatory reporting

2016 - 2019 2019 onwards

Report Solo Group Solo Group

QuarterlyPrivate:QRTs

2016, 8 weeks2017, 7 weeks2018, 6 weeks2019, 5 weeks

2016, 14 weeks2017, 13 weeks2018, 12 weeks2019, 11 weeks

5 weeks 11 weeks

AnnualPublic:

QRTs, SFCRPrivate:

NSTs, RSR

2016, 20 weeks2017, 18 weeks2018, 16 weeks2019, 14 weeks

2016, 26 weeks2017, 24 weeks2018, 22 weeks2019, 20 weeks

14 weeks 20 weeks

Financial StabilityPrivate:

Quarterly, semi-annual & annual

2016, 10 weeks2017, 9 weeks2018, 8 weeks2019, 7 weeks

2016, 10 weeks2017, 9 weeks2018, 8 weeks2019, 7 weeks

7 weeks 7 weeks

About CoreFiling

Commercial ‘off-the-shelf' XBRL software• Mature and reliable• Covers entire market• Ready to go

Provide continuous XBRL expertise to customers• Expertise in Solvency II filing (filers and regulators)• Many XBRL subject matter experts

Experience from multiple regulatory XBRL projects, including the Bank of England• Managing the market and expectations• Business focused solutions

What filers see: Post-close process

SubmissionDate

Account Close

Review Balance Sheet: Stat’ & Reg’

Allocate Source Data(excl. Look-through)

Approve Balance Sheets

Look Through Data availability from TPA

Apply validations & remediate

Allocate Data to QRT’s & Assign work

Final Review & Approve: CFO & CRO

What your regulator seesLate

submissionFirm 1

Submissionwith

consistently inaccurate data

Firm 3

Submissionconflicts with prior

filing –re-submission

requiredFirm 4

Late submissionw/ multiple attempts

Firm 2

Defining cost burden & risks

CostsRisks Impact

Productivity Loss

Business

Investment Impact

Internal Costs:

People

Time

Operational

BAU Disruption

Regulatory

Regulatory

Budget

Capital Add-ons

Model Impacts

Consulting

External Costs:

Mitigating cost burden & risks

• Submit reports on time

• Right first time

• Business & QA approval

Embed high data quality throughout the reporting process

Cost & risk = data quality

Data Quality Measure Description Basic ExampleConsistency Tests facts are consistent UK equities in £GBP values

Conformance Does the data conform to the standards (XBRL)? Currency stated @‘Euro’ not ‘Euro’

Accuracy SME review & executive a pproval SMIR

Completeness All required data is reported LEI codes unavailable reported as ‘None’ not blank cells

Uniqueness Entities or attributes unique within the report LEI codes

Persistence Data can be viewed at anytime with context XBRL instance & associated taxonomy defintions

Source Systems Reporting ToolETLData XBRL

Regulator

Reporting process - data flows

ORSA - RSR -SFRC

Source Systems Reporting ToolETLData XBRL

Regulator

Data Quality: Points of concern

ORSA - RSR -SFRC

Data Modellig

XBRLProcessor

Consolidation System

Source Systems

XBRLValidations Data

XBRL

XBRL

Reviewed

Excel C S V

XBRLRegulator

Data quality - assurance maturity

Data

XBRLValidations Data

Assurance maturity

Data Modellig

XBRLProcessor

Consolidation System

Source S ystems

XBRL

XBRLReviewed

Excel C S V

XBRLRegulator

DATA

Beacon Demo

Solvency II disclosures data quality

All SFCRs

Bad Visibility

No C/R Numbers

No QRTs

Data quality c.2500 SFCR reports

Typical errors in public disclosuresOn screen validation

Typical errors in public disclosures

• Totals not adding up

• Missing data cells

• Entire templates missing data

• Values not matching across cells

• Difficult to determine reporting units

• Different reporting units across templates in same report

• Template modified (rows deleted)

Q&A

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