Enterprise Risk Management Technology Guide :: RNA Analytics: Helping insurers embrace change

RNA Analytics: Helping insurers embrace change

Matthieu Soulas, principal actuarial consultant at RNA Analytics, assesses the major regulatory issues facing insurers. In particular, he explains how the provider can help insurers deal with IFRS 17

Matthieu SoulasWhat are the main technology trends shaping the insurance sector?

The insurance world has already been moving towards digitalisation and virtual systems and insurtechs have experienced a lot of growth.

Big data, machine learning and artificial intelligence has already started to be used by the insurance market, and particularly in healthcare and motor lines. By using these technologies, insurers can obtain greater value and make good use of the explosion of digital information to make tailored products for their clients and remain competitive.

How do you expect technology to change insurance actuarial modelling?

I think insurers will have to consider pandemics becoming a more probable risk in the future and I think predictive models will start to be used because of the lack of data. We cannot just run scenarios replicating past financial crises. There will need to be more use of machine learning and predictive models to try and assess the impact if another pandemic happens in the next decade.

What are the major regulatory issues facing insurers?

So far, what I have seen in Europe is mainly a focus on Solvency II and IFRS 17. The market has been heavily focused on IFRS 17 for the past couple of years as insurers need to interpret the principles in the accounting standard. The main challenges from the regulation involve data and speed, and the tools available to insurers did not meet that need.

Insurers have wanted to re-use the investment they made for Solvency II in IFRS 17. I would say the market almost forgot about Solvency II for a year. But with the delay to IFRS 17, insurers are back on track.

Do you welcome the one-year delay to IFRS 17?

Yes and no. It depends on the mentality of the company. Yes, it will give insurers more time to prepare for the regulation and plan accordingly. But I do see some companies putting the project on hold and this is not a good approach.

There are also some companies considering IFRS 17 and Solvency II separately. At some point, they will realise there needs to be a convergence between IFRS 17 and Solvency II.

What enhancements has RNA Analytics made to its software over the past year?

We just released an updated version of our R³S financial and risk modelling software. This was mainly focused on improving performance of the software suite, but also including new functionalities to support the new non-life library, which will be available in the coming months. All our updates are based on client input and we always improve our tool based on what the market requires.

One of the larger enhancements is the new record-level output. This allows users to output projected values at a record level, which is something our client needed for IFRS 17 reporting. This new output is much more efficient as it reduces the memory required by models and improves performance.

How can RNA Analytics help insurers deal with IFRS 17?

R³S software suite is designed to help companies meet their need for more realistic and granular modelling in financial analysis and regulatory compliance. With a single software suite, users can benefit from a consistent set of calculations, approaches and skills to improve on the granularity, accuracy and speed with which they can produce information and metrics.

The flexibility with which the suite can handle calculations, data and processes enables a business to implement the approach where it can realise the most value. For today's life and non-life insurers, RNA Analytics has the consultancy expertise, the global reach and the ability to deliver bespoke and scalable software solutions that help organisations overcome the challenges of IFRS 17.

Matthieu Soulas
E: [email protected]

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