Every year, Solvency II comes with regulatory changes. And every year, insurance companies adapt their processes to comply with these mandatory changes. Often, these are only slight changes and, thus, minor adaptations. This year, however, the changes are significant. It’s the biggest update since 2016 and impacts both finance and IT. This requires a very different approach and an early start. Discover why it’s so different and our 5 steps to tackle Solvency II in 2023.
What makes Solvency II so different in 2023?
The main difference compared to previous years is the impact of the regulatory changes. For many insurance companies, one of the biggest challenges will be getting the mandatory data out of the source systems. How do you ensure the required data is available, accessible, and reliable?
Often, this poses questions like:
Do I have the data in my source systems?
How do I get the data from my source system into my reporting system?
Is my reporting system ready for the new Solvency II requirements?
5 Steps to comply with the new changes in 2023 for Solvency II
Based on best practices, at Swap Support, we advise the following steps to comply with the changes in 2023 for Solvency II:
Step 1: Analyze the impact on your organization
First, you need to know which reporting templates impact your organization, as Solvency II contains approximately 100 reporting elements. For example, your organization may have only 8 reporting elements that are affected. Other organizations may have a lot more.
Our advice is to analyze the impact on your organization as soon as possible, including the impact on your data warehouse and reporting system. After all, you need to know how much you need to do before you can start to plan all the activities and resources.
At Swap Support, our specialists can handle the impact analysis for you. We look at the requirements in your current reporting system and compare these to the new requirements.
Step 2: Adapt your internal source data systems
The new regulations may impact internal source data systems such as your ERP system, insurance systems, and data warehouses.
Once you know what changes you need to make to your internal source data systems, you can start to apply these. We advise using a thorough maintenance and change approach, as you would with any changes to your systems.
Step 3: Ensure the data integrate correctly into your reporting system
Next, you need to test the integration between the source systems and your reporting system, such as CCH Tagetik. In most cases, you need to adjust or even implement the ETL (Extract, Transform, and Load) from the source systems to your reporting system.
Step 4: Implement the reporting system’s upgrade for Solvency II
Many insurance companies use CCH Tagetik as their reporting system. A logical choice, as CCH Tagetik provides modules tailored for the insurance industry.
Fortunately, the solution includes features enabling you to comply with the requirements of Solvency II. Every year, CCH Tagetik provides upgrades to incorporate the new Solvency II, making life a lot easier.
Our advice is to plan the implementation of the upgrade to align with the regulatory deadlines, CCH Tagetik’s upgrade calendar of the Solvency II solution, and your reporting calendar.
Step 5: testing!
The last step is to test everything thoroughly, as the changes can have far-reaching impacts on your internal data processes.
When should you start preparing for the new Solvency II requirements?
To comply with the new mandatory guidelines, it is compulsory to report by the new standards by February 2024.
Looking at the financial calendar, your financial team is probably busy enough with the regular reporting deadlines. And during the end of summer and autumn, your financial team – and more departments in your organization – will be focusing on the budgeting cycle.
In practice, this means that you should start with the impact analyses as soon as possible.
How Swap Support helps you to comply with Solvency II
At Swap Support, we love to solve complex challenges and give you independent and pragmatic advice. We like to deliver support depending on your business needs and reporting calendar.
Support on complex updates such as Solvency II taxonomy updates is part of our specialized knowledge portfolio. Our approach combines in-depth knowledge of CCH Tagetik with expertise in business processes and Solvency II.