Integrated Finance and Risk Architecture for Insurance and Reinsurance

Do you work in an insurance or reinsurance organization? Perhaps in underwriting, actuarial or finance? If so, do you recognize any of these situations?

 

  • Input from multiple databases and spreadsheets is required to produce reports that are needed for management, statutory and regulatory authorities.
  • Data from multiple data sources needs to be combined, transformed and then sent to data owners to be used for reporting.
  • Data from the same source system is distributed to different functional area, where users then take this data, massage and transform it for their respective needs.
  • Manual effort to prepare data for reporting is extensive and adds days or even weeks to the close cycle.
  • Source data is incomplete and needs to be supplemented, often manually.
  • Data needs to be constantly reconciled against each source to ensure consistent reporting.


The above are all very common situations in insurance/reinsurance organizations that are being constantly challenged with demands for more and more granular data. Business analytics, risk and regulatory demands, as well as increased statutory reporting requirements such as IFRS 9 and 17, are weighing on everyone. And it is not going to get any easier!

So, what can be done to address these challenges and increasing demands?

At Q_PERIOR, we believe that developing an integrated finance and risk architecture is the best approach to meet the increasing needs for data in a way that can be sustained and scaled to meet future demands. So what does this mean and what is involved? Essentially, a single source of truth needs to be developed where all data is integrated, transformed and reconciled into a single architecture.

The architecture must include:

  • The capability to integrate, transform and standardize data from multiple sources.
  • The provision for audit trails of all sources and changes as well as the ability to reconcile.
  • The capability to apply business rules and calculations to this data to provide the results needed to address various reporting requirements, including statutory, regulatory as well as internal management.
  • The capability to distribute data to appropriate reporting tools that used to produce reports. These tools can be part of the new architecture or data can be integrated with existing reporting tools.


In summary, insurance and reinsurance organizations need a high- performing, efficient environment in order to stay competitive. Data volumes, already massive, will only continue to grow, especially as more and more historical data is stored.

Q_PERIOR

Sounds easy right! Obviously, this is an extremely challenging undertaking, regardless of the size of your organization. But there are practical tools to make it all happen.

For example, CCH Tagetik meets the requirements laid out above and can be scaled according to the size of your organization and your data set. CCH Tagetik has robust integration and transformation capabilities, a strong accounting/allocation engine and flexible reporting capabilities. It also provides solutions for Solvency II and IFRS 9 and IFRS 17 that can accelerate compliance.

We encourage you to think about a comprehensive and integrated solution to meeting the various reporting demands that are here and on the horizon. Some planning and analysis done now could save you significant time and dollars in the future.

Q_PERIOR has significant experience with large financial transformations, IFRS 17 impact analysis and planning, and the design and implementation of integrated finance and risk architectures for insurance/reinsurance organizations. In the last five years, we have advised more than 60 insurance companies and banks in the areas of risk management and regulatory systems. We invite you to visit www.q-perior.com for more information.

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