Insurance: preparing for

Solvency II Pillar 3
10 April 2014

Disclaimer
This

material has been prepared for general informational

purposes only and is not intended to be relied upon as
accounting, tax, or other professional advice. Please
refer to your advisors for specific advice.
The views expressed by the presenters are not necessarily
those of EY.
This presentation is 2014 EYGM Limited. All Rights Reserved.
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Preparing for Solvency II Pillar III

Glossary of terms
QRTs

Quantitative Reporting Templates

SII

Solvency II

SFCR

Solvency and Financial Condition Report

RSR

Regular Supervisory Report

MCR

Minimum Capital Requirement

SCR

Solvency Capital Requirement

OFR

Operating and Financial Review

SPVs

Special Purpose Vehicles

TBD

To be determined

EIOPA

European Insurance and Occupational Pensions Authority

MCBS

Market Consistent Balance Sheet

Todays moderator
David Foster
Ernst & Young LLP (UK)
Partner
Global Insurance Finance Change
Co-Leader

Todays agenda
Introduction
Solvency

II reporting timelines and Pillar 3

requirements
An industry practitioners perspective
Key implementation challenges; European Survey
Market status and preparedness
Developing your Pillar 3 solution
Join todays Twitter discussion: #EYInsurance
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Preparing for Solvency II Pillar III

Todays presenters

Page 6

Dr Monty Cachej

Kim Harmer

Zurich Group
Head of Solvency II PMO
& Solution Management

Ernst & Young

Director

Dsir Lan

Christian Schmid

Ernst & Young

Director

Ernst & Young

Senior Manager

Preparing for Solvency II Pillar III

Todays agenda
Introduction
Solvency

II reporting timelines and Pillar 3

requirements
An industry practitioners perspective
Key implementation challenges; European Survey
Market status and preparedness
Developing your Pillar 3 solution
Join todays Twitter discussion: #EYInsurance
Page 7

Preparing for Solvency II Pillar III

Pillar 3 requirements: What are the deadlines

for reporting?
Jan

Year of reporting

2015
Preparatory Phase

Quarterly
(Q315 only)

Feb
8 weeks

Quarterly

End State (2019)

Accelerated
reporting

Quarterly

Apr

May

22 weeks

8 weeks

6 weeks

20 weeks

6 weeks

6 weeks
14 weeks

Annual

6 weeks

Key
Quarterly Solo
QRTs

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Quarterly Group
QRTs

Jul

6 weeks

Annual

5 weeks

Jun

6 weeks

Annual (y/e 2014)

2016
Full
Implementation

Mar

Annual Solo
SFCR/RSR/QRTs

Preparing for Solvency II Pillar III

Annual Group
SFCR/RSR/QRTs

Pillar 3 requirements and governance

Area

RSR/
SFCR

QRTs1

Content

Impacted business
functions

Potential Sources
report
Company Registrar
Internal MI reporting
Financial statements
Risk and Capital reporting
Compliance reporting

Business

and performance
System of governance
Risk profile
Valuation for solvency
purposes
Capital management

Finance

and Actuarial
functions
Company Secretarial
Compliance
Internal audit
Asset management
Investor relations

Directors

A Premiums, claims , exp

B Own funds, MCR, SCR
C Balance Sheet and variance
analysis of own funds
D Assets
E, F Technical provisions
J Reinsurance
G, IGT Group items
K Activity by country
Other e.g., Duration of
liabilities,

Finance

Financial

and Actuarial
functions
Asset management
Investor relations
Compliance
Internal audit
Company secretarial

statements
Internal MI reporting
Internal/Standard model
capital reporting
Internal/Standard model
technical reporting
Risk reporting
Compliance reporting

The materials issued with the preparatory guidelines introduce a new naming system for the templates that is less
transparent than stated here so we have retained the old names.

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Preparing for Solvency II Pillar III

Preparatory phase What is required to be

submitted and when?
SII preparatory phase
31/12/2014

QRT forms
Content of the submission
Narrative information
Basic information

Solo
annual

Groups
annual

subset

subset

SII full implementation

Q3 2015

Q1 2016

Solo
Groups
Solo
Groups
quarterly quarterly quarterly quarterly

1
1

13

11

Groups
annual

13

11

Participations
SII Balance Sheet

Solo
annual

Premiums, claims and expenses

paid
Own Funds, MCR, SCR

31/12/2016

1
2

Variance analysis of own funds

Assets

Non-life related forms

Life insurance related forms

Reinsurance including SPVs

Activity by country
2

Specific group templates

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Financial Stability information

Total no of forms

4
21

20

2
9

10

Preparing for Solvency II Pillar III

19

13

49

36

Todays agenda
Introduction
Solvency

II reporting timelines and Pillar 3

requirements
An industry practitioners perspective
Key implementation challenges; European Survey
Market status and preparedness
Developing your Pillar 3 solution
Join todays Twitter discussion: #EYInsurance
Page 11

Preparing for Solvency II Pillar III

Todays agenda
Introduction
Solvency

II reporting timelines and Pillar 3

requirements
An industry practitioners perspective
Key implementation challenges; European
Survey
Market status and preparedness
Developing your Pillar 3 solution
Join todays Twitter discussion: #EYInsurance
Page 12

Preparing for Solvency II Pillar III

Key implementation challenges

Accelerated close process
Data consistency
Asset reporting
IT Systems for reporting
Extent and granularity of requirements
Uncertainty
Internal and external stakeholder management

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Preparing for Solvency II Pillar III

EY Solvency II European Survey

Page 14

Preparing for Solvency II Pillar III

Todays agenda
Introduction
Solvency

II reporting timelines and Pillar 3

requirements
An industry practitioners perspective
Key implementation challenges; European Survey
Market status and preparedness
Developing your Pillar 3 solution
Join todays Twitter discussion: #EYInsurance
Page 15

Preparing for Solvency II Pillar III

Market status and preparedness

Based on EY assessment of some leading insurance companies in UK and Continental Europe

Peer comparison

Co 1

Co 2

Co 3

Co 4

Co 5

Co 6

Co 7

1. Current status of Pillar 3

project and solution:

Developed reporting
processes?

Designed Solution (IT

& reporting
architecture)?

Built or off the shelf

reporting package
installed?

Any dry runs

performed already?

Key
Yes
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Preparing for Solvency II Pillar III

No

Partial

Co 8

Market status and preparedness (contd)

Based on EY assessment of some leading insurance companies in UK and Continental Europe

Peer comparison
2. Is a tactical solution or
strategic solution
(automated solution,
data warehouse) being
considered for the
interim measures?

Co 1

Co 2

Co 3

Co 4

Strategic Strategic Strategic Tactical

Co 5

Co 6

Co 7

Tactical Strategic Strategic

3. Are there plans to

deliver a full dry run
before 2015 interim
measures?

Co 8

TBD

TBD

TBD

4. Is the reporting solution

being built to deliver the
interim measures, 2016
or the Target State
timelines? (timelines get
shorter over time)

Target
State

Target
State

2016

2016

TBD

Target
State

2016

TBD

5. What are the indicative/

estimated budgets to
complete

2-3m

3-4m

TBD

TBD

TBD

TBD

1m

TBD

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Preparing for Solvency II Pillar III

Todays agenda
Introduction
Solvency

II reporting timelines and Pillar 3

requirements
An industry practitioners perspective
Key implementation challenges; European Survey
Market status and preparedness
Developing your Pillar 3 solution
Join todays Twitter discussion: #EYInsurance
Page 18

Preparing for Solvency II Pillar III

Developing your Pillar 3 solution: Typical

implementation roadmap
2014
Work-streams

Q1

Programme
Management

Technology

People & Org

Page 19

Readiness assessment

Process
Strategic
Solution

Q3

Q4

Q1

Q2

2016
Q3

Q4

Q1

Q2

Q3

Q4

Solution design and implementation

Data

Process
Tactical Solution

Q2

2015

Update
gap
assessment

Data
catalogue/governance

To be
process
(Target)

Process
Gap/
Reqts

Process
design & dry
runs

2014 QRTs
(interim)

To be
processes
(Target)

Process
Gap/
Reqts

Functional
Requirements

Design
(inc. build Integration
or buy)

Assess
impact on
people and
governance

Quarterly
QRTs (interim)

Process design & dry runs

Align to be
process with
IT solution

Roles,
responsibilities,
training (tactical)

UAT
Testing

System
Test

Dry runs

Go Live

Roles, responsibilities, training

(strategic)

Preparing for Solvency II Pillar III

Embed
Quarterly
QRTs in
BAU

Embed Annual QRTs and

RSR

Solution insights: Accelerating the reporting

processes
Some levers for change
Data quality
Technology enablers
Process improvements

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Preparing for Solvency II Pillar III

One-minute recap

Contact us
David Foster
Ernst & Young LLP (UK)

+44 20 7951 5687

dfoster@uk.ey.com

Kim Harmer
Ernst & Young

+44 20 7951 0556

kharmer@uk.ey.com

Dsir Lan
Ernst & Young

+44 20 7783 0790

dlan@uk.ey.com

Christian Schmid
Ernst & Young

+49 89 14331 24913

christian.schmid@de.ey.com
Follow us on Twitter:

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Preparing for Solvency II Pillar III

@EY_Webcasts

Resources

www.ey.com/insurance
www.ey.com/solvencyII
www.gfsi.ey.com

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Preparing for Solvency II Pillar III

Insurance: preparing for Solvency II Pillar III

Thanks for participating

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Preparing for Solvency II Pillar III