The FINANCIAL -- Swiss Re on February 2 announced a strategic co-innovation initiative with SAP SE, market leader in enterprise application software. Working together, the two companies plan to develop a solution to address the increasingly complex demands related to financial steering and reporting of insurance companies from regulators across the globe.
Today insurance companies have to manage and report their business according to a large range of different valuations and regulatory reporting standards. Maintaining compliance and consistency is therefore a challenging process, especially as valuations are typically performed sequentially and with many redundancies. New regulations, such as International Financial Reporting Standards (IFRS) 9 and 17, will also enforce additional reporting requirements. These challenges make it difficult for insurers and reinsurers to capture reliable, comparable financial information for reporting and decision-making. They also significantly increase internal process complexity, reporting efforts and operating costs, according to Swiss Re.
Swiss Re and SAP are working on a new approach to generate multiple valuations and apply financial steering methods based on the SAP HANA® platform, enabling processes to be automated and controlled in a simple, effective way. This new approach aims to:
Manage increasing regulatory complexity with the ability to easily incorporate new valuations and reporting standards (such as IFRS and U.S. GAAP) on an ongoing basis
Reduce reporting efforts by generating multiple financial valuations simultaneously
Cut the time spent on operational tasks and controls, while increasing the capacity for analytics
Create the ability to steer the allocation of financial resources
Over the last few years, Swiss Re and SAP have already made significant progress in this area. Swiss Re has applied its deep industry knowledge to create a sophisticated multiple-valuation accounting approach to resolve related operational and regulatory challenges. During the same time, SAP has made significant technology developments with SAP S/4HANA®, SAP HANA, and cloud-based solutions. By combining forces, SAP and Swiss Re aim to create a modular, flexible system based on SAP HANA, which will simplify operations and improve business productivity by seamlessly integrating operational, actuarial and analytical data processes. The solution, which we plan to make available over time to the entire re/insurance industry, will use a simple accounting and steering approach to run multiple valuations efficiently.
Gerhard Lohmann, CFO Reinsurance at Swiss Re, said: “We chose to work with SAP on this initiative, because it is a renowned software provider with a long and deep history of working with global insurance companies. I genuinely believe that together we can achieve our strategic vision to enable integrated steering and reporting for ourselves and across the industry.”
Luka Mucic, CFO and Member of the Executive Board of SAP SE, added:
“We are proud to work with Swiss Re, a company with profound industry knowledge, to drive the development of new solutions that will provide the insurance and financial sectors with a significantly simplified approach to solving their sophisticated needs. It’s our firm belief that co-innovation projects like these are what will guide and shape the future of our industry.”