zeb.control: proven and comprehensive solution for Solvency II through the new release

Insurance companies have faced many challenges since the introduction of Solvency II: aside from the business implementation of the new requirements, it was necessary to implement a technical solution. After the initial implementation, the focus has shifted to completing and optimizing the individual implementation in order to meet the more frequent deadlines, among other reasons.

Through the current 3.30 release of zeb.control.regulatory – Solvency II the available flexibility and sustainability of the solution was extended to include necessary regulatory amendments as well as expansions to content-related functions—based on customer feedback.

Exemplary improvements

• Update to the current XBRL taxonomy 2.3.0 including a hotfix from November 5, 2018.
• Calculation of risk margins for composites: consideration of special requirements for calculating the risk margin for composite undertakings, which require a separate projection of risks for life and non-life insurance.
• Dealing with participations: extension to the effect of transition measures in order to meet special requirements from Art. 68 DRA, which stipulates that the basic own funds are reduced by the full value of the participations, provided that the value of the participations is greater than 10% of the defined own funds positions.
• Mapping active reinsurance to accident pensions and (motor vehicle) liability pensions: improved Pillar I mapping of active reinsurance to accident pensions and (motor vehicle) liability pensions:(LoBs 29 - Health Insurance, 35 - Health Reinsurance and 36 - Life Reinsurance).
• Business plausibility check for highest possible data quality: selected validation rules that were previously noticed at the end of the reporting process as part of XBRL validation are now checked at the start of the process by means of standardized review rules

Proven and comprehensive solution

Discussions with users have highlighted the holistic support that zeb.control provides for the Solvency II reporting process. Especially the accuracy and efficiency of individual process steps were highly regarded.

In customer feedback, the following aspects were named:

Pillar I:

• Granularity of used data: zeb.control makes it possible to supply the data requirements using various granularity levels and sufficiently differentiated within Pillar I and at many positions (e.g. recoverable cash flows for HRG x counterparty x year). Compared to the supply of aggregated data, evaluation based on detailed data has proven to be a good choice.
• Simulation option for various scenarios: zeb.control includes simulation and scenario management which can be used for calculating quantitative figures of Pillar I. Test and simulation calculations can also be conducted parallel to reporting.
• Automation: to meet the shortened reporting deadlines, the overall process must be as efficient as possible and largely automated. zeb.control facilitates a fully automated data import, including calculation of Pillar I, so that the user only needs to check results and approve them.

Pillar II:

• Efficient and essentially highly automated evaluation of company-own risk and solvency as part of creating the ORSA report: zeb.control has a Pillar II solution with which simulations for individually defined scenarios can be flexibly conducted and compared. The scenarios include both the mapping of individual risks and the individual parameters and configurations that are relevant for the projection. It is up to the user to utilize Pillar II independently or to build on the results of the Pillar I module in zeb.control.

Pillar III:

• XBRL generation and validation: The generation of XBRL instances with an integrated validation based on EIOPA validation rules is essential for submitting the report on time due to the very frequent reporting deadlines. zeb.control includes an integrated process in which it is possible to create, validate and make any relevant corrections to XBRL instances according to the applicable taxonomy.

General aspects applicable to all Pillars:

• Support relating to insurance regulation topics in IT (German: Versicherungsaufsichtliche Anforderungen an die IT (VAIT)): zeb.control supports users in covering the internal auditing requirements as well as generally for insurance regulations.
• Performance as part of the overall process: the requirements for implementing Solvency II are complex and challenging in terms of both the scope and regularity. The system’s performance is a major aspect for fulfilling these requirements. zeb.control is built to meet increasing performance requirements and can also satisfy the growing challenges.
• Technical and business support: Even users who have many years of experience are confronted with individual technical and business-related questions in reporting which need to be quickly answered in detail. zeb offers users of zeb.control a direct contact for support. Good availability and quick response times allow the timely answering of questions and thereby reports to be submitted on time.

Through the work flow and the option for traceability of working steps, zeb.control currently supports many insurance companies in the existing challenges of the reporting process and through its flexible and modular structure offers the possibility to quickly and efficiently implement future challenges. The solution will continue to be expanded in close coordination with users.