ifrs 17 vendor solutions event - deloitte united states · depicted below are the implementation...

IFRS 17 Vendor Solutions Event

4 October 2018

2© 2018 Deloitte Ireland LLP. All rights reserved.

Agenda

Agenda Items Speaker

Introduction and IT insights from Survey Daniel Gaffney

Overview of impact on IFRS 17 requirements to data and systems

Joanne Lonergan

Vendor Presentation Aptitude

Coffee break

Vendor Presentation SAS

Vendor Presentation FIS

Project Approach and Implementation insights David Walsh

Closing Comments Daniel Gaffney

Meet the vendors and coffee break

Introduction and IT Insights

and Survey

Daniel Gaffney


IFRS 17 System Architecture and Implementation Phases

IFRS 17 & 9

Calculation

Engines

IFRS 17

Data Load

&

Transform

Governance, Policies, Processes & Controls

Finance

Policy data

Asset Mgmt.

data

Economic

variables data

Data

Sources

Data

ManagementFinance & Actuarial Tools Reporting & Analytics

IFRS Financial Statements

Process monitoring, Workflow Control, Integrated Data Validation, Data Security & Data Lineage

Management reports

Statutory reports

Reports Analytics

Data Landing

Area

Claim data

Reinsurance

data

Planning, Budgeting and Forecasting

General Ledger

Data Foundation

Source Data store

Data

Sta

gin

g

Actuarial

Models

Scenario Generation

Disclosures

Model Point Files

Risk Modelling

Asset Liability Modelling

Master / Reference Data Management

Meta data, Reference Data Definitions, Data Standards, Hierarchies & Dimensions

Operational reporting

Management information

Statistical analysis

ETL

Depicted below are the Implementation phases proposed to ensure successful IFRS 17 transition. On the right is the target E2E system architecture and the various

components supporting an IFRS 17 solution, including high level data flows from source systems to the outputs for both internal to external reporting. This should

aid insurers with the “requirements” and “vendor selection” phases of implementation.

Consolidation & Elimination

Accounting

Hub

Results Data Store Data Mart / Data Warehouse

BECFengine

IFRS 17 Sub Ledger

Expense Allocation

IFRS 9

CSMengine

Discount engine

RAengine

Capital Management

Detailed

Design

Build

Test

UAT

Transitio

n

Parallel

Run

Go Live

Operate

I

m

p

l

e

m

e

n

t

a

t

i

o

n

Impact

Assess

Requirem

ents

Vendor

Selection

Planning


Common Technology & Data Challenges

Challenge Impact*

1. Changes to source systems High

2. New integrations and impacts to existing infrastructure High

3. New actuarial models and IFRS 17 calculations High

4. Chart of Accounts impacts and changes to accounting rules High

5. Updates to cost allocation process Medium

6. Need for Production/actuals data for testing Medium

Challenge Impact*

1. Greater data granularity across end-to-end architecture

High

2. Missing or incomplete data to support historic data High

3. Data model inconsistencies across finance and actuarial systems

High

4. Non-standardised source system data High

5. Increased pressure on period close processes High

6. Greater need for reconciliations and data auditability Medium

Technology Data

The transition to IFRS 17 will have a profound impact across the end-to-end IT landscape, including policy administration, claims and brokerage systems, actuarial system, reporting solution and ERP GL platform. The impacts will be both functional (new functionality and extensions) and technical (storage and capacity) in nature. In some cases, new applications will need to be introduced into the IT landscape.

*Degree of impact and ability to meet IFRS 17 Requirements


IFRS 17 Survey Results

With what aspects are you struggling in preparing your technology solutions to support IFRS 17 compliance? Select all that apply. (Excludes “I don’t know responses. Percentages do not total 100 due to overlapping responses

Capturing data inputs across functions

Calculation capabilities

Performance issue of technology solutions

Reporting interface

Data storage/management capabilities

User interface

Cyber security

With what aspects are you struggling in implementing your technology solutions to support IFRS 17 compliance? Select all that apply. (Excludes responses of less than 2%. Percentages may not total 100 due to overlapping options.)

Budgeting enough resources for IFRS related technology solutions

Finding the vendors with technology solutions we need

Having time to implement new technology solutions

Overcoming cultural inertia

Designing appropriate technology solutions

Ensuring adequate cyber security

Ability to deliver in parallel existing programme commitments

Ability to provide sufficient staff time to deliver the change

Integrating operations (i.e. finance, risk management, actuarial) to optimise the use of new technology solutions



To what extent do you feel your financial reporting administrative and/or actuarial systems need to be changed to meet the requirements of IFRS 17? (excludes the percentage of those who gave a “I don’t know response”)

My current systems technology requires significant upgrades

My current systems technology requires moderate upgrades

My current systems technology do not require upgrades

Composite insurance

Life insurance

Health insurance

Non-Life insurance (excluding health insurance)

Reinsurer

Please indicate your agreement: we are able to find the software we need.

Strongly agree

Somewhat agree

Neutral Somewhat disagree


Key Takeaways


Overall the top three expected benefits are: financial statements that better reflect business performance; easier access to capital markets; and improved information to support product design.

1

2

5

4

3

6

7

8

Just enough time to get ready

Upgrading technology is necessary

Significant implementation costs have been budgeted

Technology and acquisition of specialist talent underpin implementation budgets

Actuarial, accounting and collaboration skills will be in high demand

Lower equality, less profit volatility and slower profit emergence

Stakeholder awareness is growing quickly

Seeing more benefits v’s costs

System Requirements

of IFRS 17

Joanne Lonergan


Overview

IFRS 17 Challenges for models and systems

IFRS 17 Calculation

Engine

Storageand Tracking of Data

New Disclosures

Granularity of Data


Sources of Profit under IFRS 17

Future Cashflows

Time Value of Money

Risk Adjustment

CSM

Experience Variance

Change in Risk Adj.

Release of CSM

Profit

Insurance Finance Income or Expenses

Investment Income

±

±

±

±

=

IFRS17 Calculation Engine

Additional IFRS17 modelling and system challenges

Total IFRS 17Insurance Liability

Insurance Service Result

FinanceResult


Storage, tracking and granularity of data


Why is data such a

huge issue for IFRS 17?

More reporting due to

explicit building blocks

Calculation and

reporting of CSM

Granularity of

accounting disclosure

and postings

Need for historical

data on transition


New disclosures


Ledgers

• Update to allow for RA & CSM on Balance sheet

and amortization on P&L

Group Systems

• Consolidation now needs to allow for CSM & RA

Planning & Forecasting

• Needs to project theCSM & RA

• New KPIs

Management Information

• New Reports/KPIs

• Allowance for CSM


What then?

IFRS 17 Challenges for models and systems

Can your system beeasily adapted for these

changes?

What about the changes needed for IFRS18 and

Solvency III?

Project Approach and

Implementation Insights

David Walsh


RequirementsProcess

ManagementEvaluation &

Selection

Here is a high level Vendor Selection Approach to assist you with selecting the most appropriate vendor for your IFRS 17 solution.

Vendor Selection Approach

• Agree on

functional and

non-functional

scope

• Establish

evaluation

criteria weighting

• Establish and

agree evaluation

criteria and

scoring

methodology

• Gather and

prioritise

requirements

• Finalise vendor

short list

• Prepare request to

vendor providers

• Issue request to

vendor providers

• Prepare scenarios

and functional area

demo scripts

• Establish and agree

demonstration

scoring methodology

• Ingest effort and

responses to date

• Facilitate

requirements re-

prioritisation

• Read and evaluate

vendor provider

responses

• Facilitate functional

and non-functional

requirements

scoring

• Capture and collate

priority, vendor self

assessment and

scoring for

consensus

moderation

• Schedule and hold

demonstrations

• Capture

demonstration

scores and

comments

• Capture vendor

license costs from

RFP

• Refine licence

metrics with

vendors to improve

accuracy

• Compare vendors

costs

• Agree vendor

scoring result

consensus

• Validate results

and recommend

preferred vendor

provider

• Prepare report

with findings to

the Steering

Group

Refine

RequirementsIssue RFP

Evaluate vendor

responsesDemonstrations Cost model

Vendor

assessment report


IFRS 17 Impacts & Program Structure

Finance

Key customer due to

implications on

Financial Statement

returns

Help to ensure

program budget is

defined and

adhered to

Actuarial

Expert knowledge

will be required to

ensure that the

system is capable of

meeting the

requirements

Knowledge

required to define

logic, build

models and

reconcile

Business

Clear business

case and support

Program

sponsor to

ensure budget

and

management

buy-in

Data and

Technology

Data sourcing and

interface

Data storage /

foundation

Knowledge of

Actuarial

Modelling software

Target

Operating Model

Integrated Finance,

Actuarial, IT and

Business delivery

model

Future of Work

Integrated

workflow

management

Governance PMO Leadership

Results from our IFRS 17 impact assessments have identified the following impacted areas and it is recommended that your program structure reflects same.

Medium HighLow

Program Effort


The following critical success factors will ensure a successful IFRS17 project

Critical Success Factors

The High Level Roadmap is designed to deliver an integrated IFRS17 solution while minimising implementation risk and cost of ownership

Assign Appropriate Resources and Skills

Design, Build, Test andChange Management

Deliver as an Integrated Program

Plan & Monitor

Critical Success Factors

Scope & Approach

• Early identification and securement of key project resources

• Adopt program structure…not BAU

• Proactive engagement and planning with external delivery partners

Realisation of CSFs

• Early set up of enabling infrastructure (i.e. data, governance, COE)

• Prioritise upfront design and data discovery

• Follow robust sign-off and change process

• Produce integrated plan (including RAID)

• Ensure process-drive workstreams

• Deliver transparent status reporting

• Operate with an end-to-end program discipline

• Set up integrated process tracks

• Follow agile, scalable approach

• Early identification of high level requirements and data discovery

• Consistent tracking to high level requirements / traceability matrix

• Defined scope management process with robust governance

Business acceptance

Sustainable solution

On time delivery

OUTCOMES


Below are some key findings from the 2018 insurance survey, specifically calling out system / technology aspects.

Global Deloitte IFRS 17 Insurance Survey 2018

IFRS 17 – What are your peers doing?

Closing Comments

Daniel Gaffney

Thank YouAny Questions?


Deloitte is a multidisciplinary service organization which is subject to certain regulatory and professional restrictions on the types of services we can provide to our clients, particularly where an audit relationship exists, as independence issues and other conflicts of interest may arise. Any services we commit to deliver to you will comply fully with applicable restrictions.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries bringing world-class capabilities, insights, and high-quality service to address clients’ most complex business challenges. To learn more about how Deloitte’s approximately 245,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn, or Twitter.

http://www.deloitte.com/about

https://www.facebook.com/deloitte?_rdr=p

https://www.linkedin.com/company/deloitte

https://twitter.com/deloitte

ifrs 17 vendor solutions event - deloitte united states · depicted below are the implementation...

Documents