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SAP (Walldorf, Germany) has announced what it calls a strategic co-innovation initiative with Swiss Re (Zurich) to create a solution based on SAP HANA aimed at addressing increasingly complex demands from regulators globally related to financial steering and reporting of insurance companies.

Insurers today must report according to broad range of valuations and regulatory reporting standards, making compliance challenging, especially given that valuations are typically performed sequentially and with many redundancies, an SAP statement notes. 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, and they also significantly increase internal process complexity, reporting efforts and operating costs, the SAP statement elaborates.

New Approach to Generating Multiple Valuations

SAP’s “coinnovation” effort with Swiss Re takes what the vendor calls a new approach to generating multiple valuations and applying 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 achieve the following, according to SAP:

• 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
  

  Luka Mucic, CFO, Member of the Executive Board, SAP SE.

SAP reports that the two companies have already made significant progress. 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 claims to have made significant technology developments with SAP S/4HANA, SAP HANA, and cloud-based solutions. By combining forces, the companies aim to create what SAP calls 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 is planned to become available over time to the entire re/insurance industry, will use a simple accounting and steering approach to run multiple valuations efficiently, according to SAP

“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,” comments Gerhard Lohmann, CFO Reinsurance, Swiss Re. “I genuinely believe that together we can achieve our strategic vision to enable integrated steering and reporting for ourselves and across the industry.”

Significantly Simplified Approach

“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,” comments Luka Mucic, CFO and Member of the Executive Board of SAP SE. “It’s our firm belief that co-innovation projects like these are what will guide and shape the future of our industry.”