End-to-end standard software solution for regulatory and statistical reporting
As of January 2016, all insurance companies operating in the European Union must comply with the Solvency II (Pillar 3) reporting requirements imposed by the European Insurance and Occupational Pensions Authority (EIOPA). Supervisory authorities in some European countries require local insurers to additionally submit National Specific Templates (NSTs) defined by them. Furthermore, the European Central Bank (ECB) collects statistical information on the financial activities of insurance companies in the eurozone. Similar reporting obligations have been recently introduced for pension funds as part of the IORP II Directive (IORP - Institutions for Occupational Retirement Provision) and will apply starting in the third quarter of 2019.
To comply with these rules, reporting agents have to regularly collect multi-format data from various sources, validate it for consistency and quality and submit it to their national competent authority (NCA). The reporting requirements are regularly improved and refined, resulting in the need to constantly follow regulatory updates and implement them within the reports. To address these demanding challenges, we developed ABACUS/Solvency II, an off-the-shelf standard reporting software for insurers and pension funds.
With ABACUS/Solvency II, we offer an end-to-end standard software solution to support insurance companies and pension funds in meeting their reporting requirements under EIOPA’s Solvency II (Pillar 3) and IORP II Directives. It covers the wide range of functionalities from data collection, validation, and preparation to the submission of the required quantitative and qualitative reports. The reports can be prepared for individual entities as well as for groups.
Additionally, our product supports the latest ECB statistical reporting requirements (ECB add-ons) that are included within EIOPA’s xbrl taxonomies as well as national specific templates (NSTs) for Ireland and France. Thus, it allows for a consistent way of reporting across EIOPA’s, ECB’s and local regulations.
ABACUS/Solvency II can be flexibly used for smaller, medium-sized as well as for very large insurers, reinsurers and pension funds with complex and diverse IT landscapes. The solution supports reporting agents in integrating big volumes of data in various formats stemming from multiple functions and thus improving data quality and consistency. It offers diverse possibilities to analyze the stored data and can therefore also be used outside of regulatory and statistical reporting, for example, for management reporting.
We work closely together with industry and regulators and constantly adjust our software to clients' needs and in accordance with evolving reporting requirements.
The regulatory framework of Solvency II Pillar 3 requires insurance and reinsurance companies that have operations in the European Union to submit detailed quantitative information on their activities in the form of quantitative reporting templates (QRTs). All these templates need to be delivered to the regulator (EIOPA) in XBRL format on a quarterly and annual basis. Both data creation and collection for the QRTs are particularly demanding, since the QRTs draw on data from different functions and usually various data sources (e.g. finance, risk, investments, etc.).
ABACUS/Solvency II covers the generation and submission of all of these quantitative reports for solo entities as well as for groups.
Similar to the Solvency II reporting for insurers, in collaboration with the ECB, EIOPA introduced in collaboration with ECB new reporting requirements for pension funds as part of the IORP II directive (IORP - Institutions for Occupational Retirement Provision). The approach of the reporting is similar to Solvency II reporting and mirrors many of the used concepts (e.g. XBRL based reporting, predefined set of validation rules, quarterly and annual submissions, etc.). Reporting agents are to transmit the requested data regarding occupational pensions to the national central bank (NCB) or another national competent authority (NCA) on a quarterly and annual basis. The quarterly reporting will apply from the third quarter of 2019 and the annual from 2019 onwards.
In line with these new requirements, we have extended our proven ABACUS/Solvency II solution to cover the reporting requirements for pension funds as specified by EIOPA within the IORP II directive.
ECB regulations on statistical reporting imposes additional reporting obligations on insurers and pension funds. These requirements are an integral part of the XBRL reporting taxonomies that are maintained by EIOPA for Solvency II as well as for IORP II. As such, these requirements are also covered as part of our respective Solvency II and Pension funds modules.
To address the requirements specific to the local market and the nature of local insurance companies, competent authorities in some European countries introduced a number of National Specific Templates (NSTs). The NSTs have to be reported in addition to Quantitative Reporting Templates defined by the Solvency II (Pillar 3) Directive.
ABACUS/Solvency II supports the NSTs for Ireland and France. More countries are expected to follow as they define their NSTs.
In addition to the population and generation of reporting templates, insurers, reinsurers and pension funds must submit qualitative information in the form of narrative reports, such as the Solvency Financial Conditions Report (SFCR) or Regulator Supervisory Report (RSR). These reports are usually generated once a year and have to provide comprehensive information on such topics as business environment and performance, governance, risk profile, capital management and others.
ABACUS/Solvency II helps insurers to create these reports by allowing for the access of the data from the quantitative reports and including an interface to MS Word.
With ABACUS/Solvency II, BearingPoint has already earned the trust of its clients and recognition from a variety of industry experts. Since the Solvency II Go-Live in May 2016, our clients have been successfully generating and submitting their required quarterly and annual Solvency II reports to local supervisors in numerous European countries, including the Central Bank of Ireland, the PRA in the UK, BaFin in Germany, CAA in Luxembourg, FI in Sweden, IVASS in Italy, ACPR/Banque de France, and FMA in Austria.
For demonstrating excellence in the field of Solvency II reporting, ABACUS/Solvency II has been featured in the Gartner Guide for Solvency II Solutions and has been honored with three industry awards in the categories “Best Regulatory Reporting Solution/Software”, including the InsuranceERM Awards 2016, as well as the Buy-Side Awards 2016 and the Insurance Risk Awards 2015 by Risk.Net.
Data management in ABACUS/Solvency II takes place within a relational database. An expansion of the data model - or the use of existing data structures beyond the base configuration of the application - is possible at any time. Customer-specific requirements can be implemented in the existing application on the basis of this open data model at any time.
The software offers standardized, normalized XML interfaces to receive the raw data from a wide range of the clients' source systems. These interfaces help to keep data uniform and nearly free of redundancies for the user. Once collected, the data can be used in multiple reports. In addition, ABACUS/Solvency II offers Excel-based data imports at the report level as well as several options for importing and capturing data
The pre-processing of this data is not necessary when using ABACUS/Solvency II, since the data model has been developed to accommodate the specific needs of Solvency II and IORP II reporting. The solution covers the complete workflow, ranging from the import of data to validation, the sign-off process and the generation of quantitative reporting templates (QRTs) in XBRL format. Additional modules support insurance companies in the preparation of required qualitative reports - Regular Supervisory Report and Solvency and Financial Condition Report – as well as ECB insurance statistics reports. A direct connection can be made between the modules. The combination of the modules forms the optimal support for insurance companies to fulfil their reporting requirements.
Through ongoing regulatory monitoring and functionality updates, ABACUS/Solvency II is able to keep its reporting modules up to date with European and local reporting requirements, helping insurers to avoid the need for continuous adaptations and testing in-house.
ABACUS/Solvency II leverages a highly extensible Java and web-based client-server, three-tier-architecture, a relational database system, and standard interfaces. With its IT infrastructure, the software is platform-independent, multi-tenant and scalable and can be flexibly adapted or enhanced, both technically and functionally. It can also be smoothly integrated into complex system landscapes.
ABACUS/Solvency II is based on a modern system architecture that is viable for the future. Significant components of this architecture include a flexible client-server architecture (three-tier architecture) and a relational database. ABACUS/Solvency II runs without dependence on platforms and due to its multitenant capability and scalability, is an established aid for both small and large insurance companies. Its architecture provides a hierarchical, customized reporting structure (entity-, solo, group-level) in combination with graduated user rights for e.g. access or data validation.
Furthermore, ABACUS/Solvency II is a web-based application and therefore also offers an ideal basis for an outsourcing solution. ABACUS/Solvency II is available as an on-premise solution and as SaaS (software as service), which allows insurance companies to further minimize the IT development costs and deployment effort.
We experienced a smooth first annual reporting under Solvency II. ABACUS/Solvency II proved to be a reliable product for end-to-end Pillar 3 QRT reporting.
Dr. Andreas Herbstrith, Head of Consolidation & Reporting Solutions at Allianz Group / July 2017, Press release
We met the deadline for the first annual group reporting under Solvency II. Both the proved and reliable ABACUS/Solvency II solution and the support of BearingPoint made a significant contribution to this success.
Jean-François Billac, Director of Accounting Operations at Médicis / July 2017, Press release
We opted for ABACUS/Solvency II for two major reasons: it’s a proved solution and it was available as SaaS. So we will be able to achieve a rapid deployment within a few months with customized processes.
Johan Dahlgren, Chief Executive Officer at AFA Insurance / July 2016, Press release