Given all of the insurance regulatory reporting requirements around the globe—some of which remain in flux—carrier management might feel driven to build reporting factories. But in the long run, carriers likely would not be able to manage these siloed systems effectively or even maintain them.
To avoid major bottlenecks and congestion in submitting different regulatory packages to national supervisors on a timely basis, insurers should be planning a streamlined, integrated reporting process. As Accenture details in it its report, The Insurance Reporting Challenge: Building an Integrated Framework, we believe insurers can efficiently attain and maintain compliance with various reporting requirements and achieve internal control over improved financial and prudential information by:
- Modeling the multi-standard processes in a holistic, integrated approach, which considers reporting as a consistent object on a data production line.
- Designing processes with the ability to access greater details concerning sub-processes, interdependencies and points of contention. This can help identify the best options for simplifying, streamlining and industrializing processes and organizing annual, quarterly or biannual calendar runs.
- Establishing a governance and control framework across the entire value chain to help secure timely multi-standard productions and inter-standards reconciliations, with the required audit trail and quality levels.
- Defining a target state and a step-by-step roadmap for getting there while also allowing for flexibility. Carriers should revisit both regularly to facilitate compliance.
- Monitoring and anticipating regulatory changes far enough in advance to allow for implementation―particularly in systems―and to prevent potential side effects associated with imposing one standard over another.
- Integrating the different business and IT teams in a culture of multi-standard reporting, and fostering the implementation of sound practices. In our view, that includes moving from a project-mode basis to a production- mode basis both at the operational and management levels.
- Regularly benchmarking against market practices on day-to-day issues.
How could adopting an integrated reporting framework lead to overall performance improvements? The whole production value chain offers possibilities for finding and fixing deficiencies or insufficiencies in various areas, such as:
- Model changes and computational challenges.
- Links between Solvency II’s Pillar I and Pillar III.
- Links with accounting.
- Links with Solvency II’s Own Risk and Solvency Assessment processes.
- Quarterly reporting.
- XBRL validation and submission.
- Multiple standards reconciliation.
- Internal reporting.
To learn more, download the Accenture report, The Insurance Reporting Challenge: Building an Integrated Framework