tagetik solvency ii introduction
TRANSCRIPT
SOLVENCY II COMPLIANCE Made simple with TAGETIK
Background
Solvency II Reporting Challenges
Tagetik Solvency II Solution
The Tagetik Difference
Tagetik in Action
Agenda
• EU Directive to codify and standardize insurance
regulations
• Define amount of capital EU insurance companies must
hold to reduce risk of insolvency
• A single regulation to enhance consumer protection
• Similar to Basel III for Banks
• Will come into effect on January 1, 2016
• Impacts all insurance companies with EU operations
Solvency II Background
Solvency IITurning significant change
into competitive gain
Solvency II: The 3 Pillars
• Non life underwriting
• Life underwriting
• Special health
underwriting
• Interest rate
• Market
• Operational
• Concentration
QUANTITATIVE REQUIREMENTS
Balance sheet evaluationSolvency Capital Requirement (SCR)Minimum Capital Requirements (MCR)
QUALITATIVE REQUIREMENTS & SUPERVISION
System of GovernanceOwn risk & solvency assessment (ORSA)Supervisory Review process (SRP)
DISCLOSURE REQUIREMENTS
Public disclosure of FCSR (Financial Condition and Solvency Reports)RSR (Common Supervisory Reporting)
Pillar I
Pillar II
Pillar III
Risk
Solvency II: Law Requirements and Deadlines
2009 2010 2011 2012 2013-14 2015-16
Framework Directive (L1)
Definition of principles for the solvency system
Implementing Measuring (L2)
Regulation adoption(Dir. SII)
Supervisory standards (L3)
Guidelines to guarantee a convergent application and implementation of regulations
Regulation transposition by national authorities
2016 Solvency II enforcement
DirectiveDevelopment
Directive AdoptionCouncil & Parliament
Implementation Member States
QIS51° Tagetik POC
Tagetik Pre-packaged
solution
Tagetik Maintenance
Service
Solvency II: Reporting and Compliance Challenges
• Data Integration and Quality
• Complexity of Calculations
• Changing Regulatory Requirements
• Creating and Maintaining Governance Processes
• Differing Financial vs. Management Reporting and
Disclosure Requirements
• Reconciling Different Reporting Formats
• Ensuring Adequate Audit Trails and Controls
Solvency
II
Solvency II: Reporting Challenges
Source: KPMG
Solvency IRegulatory
Requirements
Solvency IIRegulatory
Requirements
Solvency IIIManagement Model
Surplus Capital
TechnicalProvisions
Surplus Capital
Capital Add-on
SCR
MCR
Margin
Best Estimate of Liabilities
Surplus Capital
IECR
Margin
Best Estimate of Liabilities
3
2
1
3
2
1a
1b
Standard SCR
Adjusted SCRMGF
RMM 1. Technical provisions to match
insurers’ liabilities
a) Best estimate of liabilities
b) Market Value Margin
2. Regulatory capital requirements
3. Capital held in excess of regulatory
capital requirements
Solvency II: State of Readiness in Europe
Figure 1: European Solvency II readiness
60%
50%
40%
30%
20%
10%
0%Already
compliantIn the courseof 2014
In the courseof 2015
In the courseof 2016
In the courseof 2017
Later
2%
56%
20%
32%
58%
11%
19%
1% 1%
2013
2012
Figure 2: Overall implementation status by pillar
2012
2013
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0Pillar 1 Pillar 2 Pillar 3
1. The requirements are not met
2. Some of the requirements are met
3. Most of the requirements are met
4. All of the requirements are met
5. The company already goes beyond the Solvency II requirements
Overall, the insurance industry is on track to implement Solvency II by 1 January 2016; however, a significant amount of work is needed between now and then to address preparedness across all three pillars.
Source: E&Y European Solvency II Survey 2014
“With Tagetik’s solution in place, TVM is proud to be the first European insurance company with an integrated and standardized statutory and Solvency II-compliant reporting processes.”
Emile Kaal, Finance directorTVM
Leading the Way to Solvency II Compliance
The Tagetik Solution: Pre-packaged Solution for Solvency II
Pre-built complete set of accounts, data entry forms, reports, diagnostic checks, calculation rules, narrative templates and XBRL output to satisfy the EIOPA requirements for Solvency II
Tagetik offers a service package to maintain alignment with changes to EIOPA regulations
Tagetik distributors and partners offer a service to maintain national specific requirements
Compliance now, compliance in the future
What does the pre-packaged solution cover?
Solvency II Pre-Packaged Solution Scope
Pillar I Pre-packaged calculations to cover standard formulas
Pillar II Expected Solvency position & ORSA narrative elements
Pillar III 100% coverage EIOPA Requirements with QRT, FCSR and RSR
Tagetik: The Unified Approach to Solvency II
Create a foundation of reliable, traceable data
Loading and mapping from
internal/external data sources
Data collection and consolidation
Workflow
SCR and MCR Calculation
Integration with financial data
Data validation
As the basis for all reporting and disclosure requirements
Financial Reporting
Management Reporting
Dashboards
Disclosure Management
XBRL output
Integration with SharePoint
datamodel TVMfase 1
Mgt.Reporting
QRT’s, XBRL, Narratives
Generalledger
Tagetik Solvency II pre-packagedsolution
Tagetik
FinancialStatements
Data model & calculations Solvency II
pre-packagedsolution
Local SIIrequire-ments
QRT source data
Pillar 1source data
Inputs Outputs
ETL
Customer Data Model
Tagetik Solvency II Architecture
• All QRTs
• Annual
• Quarterly,
• Group,
• Solo
• Data-checks and log-files
• Templates for RSR/ SFCR
• Updates from EIOPA
• XBRL output
• Documentation
Pre-packaged Tagetik application with all building blocks
Tagetik Solvency II Solution Components
The Tagetik Difference
Tagetik “Full Service” Solvency II Reporting
• Built-in intelligence
• Pre-built calcs and reports
• Workflow and validation
• Project consulting
• Technical consulting
• Check-up consulting
• Training and support
• Regulatory updates
Achieve fast Solvency II compliance with our Pre-packaged application and flexible customizations
Streamline your data generation, consolidation, reporting and disclosure processes to save time, effort and costs each step of the way
Stay aligned with changing regulations with regular Pre-packaged application maintenance
Benefit from Tagetik’s rich project experience in the European financial services sector
Unify financial, management and regulatory reporting as well as other CPM processes in a single product
Tagetik: One Solution for Solvency II
Solution Benefits
Tagetik provides an excellent audit trail. TVM can now easily trace and show the adjustments that derive statutory consolidation and Solvency II reporting from one source.
Auke Jan HulskerSofia Consulting
Tagetik: One Solution for Solvency II and Beyond
XBRL
IFRS 4
Regional Disclosures
Financial Statements
Board Books
Future Regulations
A Single Platform for Multiple Reporting and Performance Management Needs
IFRS Group Financial Statement Consolidation
MVBS – Market Value Balance Sheet ConsolidationOwn Funds (OF)
Quantitative Reporting Templates (QRTs)Regular Supervisory Reporting (RSR)
Solvency & Financial Condition Report (SFCR)
Process Details
Actual / Monthly ReportingForecastPlanning
IFRS Consolidation
MVBS
Solvency II Reporting
Planning & Forecasting
Many Insurers Trust Tagetik for Solvency II
The Company: TVM
Founded in 1962, 400 full-time employees
Netherlands-based; offices in Belgium, France, Germany
Transportation Insurance
Project Scope Results/Benefits
• Local close
• Align processes to simultaneously address statutory,
Solvency II and management reporting
• Automate consolidation and reporting environment
for 30 separate company entities
• Create a single solution for data collection and
storage, entry forms, consolidation, reporting
• Provide built-in financial controls and validations,
with full traceability and transparent audit trails
• Automated Solvency II Pillar 3 calculations and
reports
• Meet Solvency II requirements in parallel with statutory
reporting, interco elim, and fast close
• First European insurance company to standardize
statutory and Solvency II-compliant reporting
• Simple and cost effective solution for meeting the
reporting requirements of Solvency II
• Automated process consumes fewer resources
The Company: Gruppo Credem
Listed on Italian stock exchange since October 1997
Headquarters in Reggio Emilia, Italy
Commercial Banking, Insurance,Asset Management
• Cover Solvency II P2-P3 and local requirements
• Single-product to manage supervisory reporting,
planning & budgeting and more
• Enterprise Data Warehouse to support new
infrastructure, integrate with P1 calculation engines
• Reduce operating risk
• Enhance information quality, efficiency, availability
• Enable users independence
• Single platform for multiple requirements: reporting,
budgeting, planning etc.
• Full compliance with Solvency II P2 and P3
• Complete auditability for Solvency II processes and data
changes throughout the process
• Collaborative reporting on P2, integrated with DWH
• Greater analysis capability for CFO and quicker answers
for CEO
• Better business management capabilities for Board
Project Scope Results/Benefits
The Company: Talanx AG
Headquarters in Germany, operating in 150 countries
22,200 Employees Worldwide
Global B2B Insurance Focus
• Meet Solvency II P3 reporting requirements in Q1 2014
• Implement a single solution for solo/group reporting
• Functional guidance and support for local Pillar 3
• Coordination and synchronization of parallel projects
Support of the standard formulas for Pillar 1
• Pillar 3 reporting must consider the public and capital
market perception – i.e. the Solvency Financial Condition
Report (SFCR)
• Tagetik selected since it was already
successfully used for IFRS reporting
• Solvency II solution supports all Pillar 3 reporting
requirements
• Single software tool for solo/entity and group
reporting and provides support for standard
formulas
Project Scope Results/Benefits
DemoTagetik in action
• Solvency II deadline is approaching quickly
• Tagetik is a leader in Solvency II solutions
• Achieve compliance fast and compliance that will last
• Leverage the success of other leading insurance companies
• Stay ahead of changing regulations and much more
• For more information:
http://www.tagetik.com/solutions/process/external-rep
Why Tagetik for Solvency II? Why Now?
www.tagetik.com
Thanks
Stellan RosmanCustomer Solution Manager
Tagetik Nordic