In addition to the risk and finance data challenges of the Standard Formula, the Internal Model approach brings with it the challenge of model validation and governance. Also, dry runs are highlighting the logistical challenges of running some Solvency infrastructures, even with the support of the project team that built it, which will disperse in the near future. The next step beyond compliance is efficiency in a business-as-usual environment. This solution is already in production at number of large insurers, and is founded on experience with insurers who pioneered risk and economic capital programmes long before the regulations were as clear as they are today. As such, this solution is adaptable to regulatory changes and the evolution of the insurers IT and business landscape. For more information please visit: http://www.secondfloor.com/solution/eframe-for-insurance-solvency-ii-internal-model

1. eFrame®
for Insurance Solvency II
Internal Model
An efficient, automated control and reporting
solution for Solvency II Internal Model
www.secondfloor.com

2. eFrame®
for Insurance Solvency II
Internal Model
An efficient, automated control and reporting
solution for Solvency II Internal Model

3. Benefits of choosing the Internal Model
Internal Model implementation challenges
Insurers taking the Internal Model When preparing an internal model
approach to Solvency II reporting are doing so for a approach for regulatory approval and subsequent
variety of reasons. ongoing Solvency II reporting, insurers typically run
into a number of technical and business issues:
For some, the business is too complex to fit the
Standard Formula, while others already have • Process governance – the internal model
a sophisticated business-wide model in place lacks the necessary documentation, controls and
for risk measurement and management, which audit trail to demonstrate its ongoing validity to
can be leveraged to support the internal model the regulator
approach. Others estimate that they can lower • Data collection – the data, calculations
capital requirements by providing comprehensive, and people required to produce the report
granular data using a bespoke, regulator-approved are dispersed across the business, making
internal model. For many, it is a combination of all collection, reconciliation and validation an
three. arduous task – even when a process already
But even where an internal model is already well exists for it
embedded, there is a difference between a model • Repeatability – the complexity of producing
that is used for internal risk management and a Solvency II report casts doubt over the
one that will meet with the approval of an external organisation’s ability to repeat, efficiently, the
regulator. For most insurers, there is a lot of work same process every quarter, especially after the
to be done to ensure the model is validated, original project team disperses, notwithstanding
documented and appropriately governed – and its ability to handle ad-hoc requests such as
that it is capable of using it effectively to deliver an stress-testing
accurate, consistent, quarter-by-quarter view of the
organisation’s risk profile. • Manual effort – a huge amount of time is spent
manually collecting data, performing calculations,
reconciling and normalising data across business
units, and producing the final report, which takes
resources away from the day-to-day business
• Time constraints –producing a Solvency
II report can take many weeks of coordination
effort, making it hard to meet regulatory reporting
deadlines (typically 3-4 weeks after quarter end)
• Process bottlenecks – when the report is
being produced manually, there is a risk of data
delivery delays and query resolutions creating
bottlenecks in parts of the process.

4. An efficient, automated • Taxonomy-driven data modelling – creates
a data model with standard, firm-wide definitions
control and reporting and classifications for every data point required,
solution for Solvency II not only for the quantitative reporting templates
(QRTs),but also for other business analytics
Internal Model reporting
eFrame® for Insurance Solvency II Internal
• Workflow – sets up responsibilities and a
Model orchestrates the collection of data and
process flow for supplying and validating data for
calculations for Solvency II Internal Model
Solvency II analytics and reporting. Email alerts
reporting, introduces governance and workflow
and escalations ensure data is supplied and
to ensure accurate reports are produced on time,
validated in a timely way
and provides a full audit trail for all aspects of the
report production. • Solvency II templates – uses pre-built
templates to accelerate the setup and
Using the solution, insurers can accelerate
report submissions, including a ready-made
Solvency II implementations and embed Internal
environment for Risk QRT reporting and the QIS
Model-based reporting as an automated,
model
repeatable, controlled and audited process at
solo and group levels. • Integration with existing systems – imports
data automatically from finance, modelling,
Features risk and compliance applications, including
eFrame® is a highly configurable software spreadsheets
platform that is tailored to the internal modelling • Time Window-Driven Reporting™ – one
processes chosen by an organisation. Once in click triggers the process to generate a complete
place, it automates, orchestrates and documents Solvency II report within a specified timeframe,
the analysis and reporting of Life, P&C, Market, whilst preserving flexibility (typically 3-4 weeks
Credit, Operational and other risks in line with the after quarter end)
approved model.
• Full audit trail – preserves a record of every
• Enterprise visualisation – discovers and action taken to create a report, every calculation
maps the processes, organisational hierarchies, made in the production of the figures, and every
systems and data sources inherent in an source system supplying the underlying data.
organisation today, to provide a start point for
developing or modifying an internal model
approach
Capital calculation
Consolidation
SCR/ MCR
Calculators
ESG Actuals vs Appetite
Scenarios/ Risk factors Capital
Model parameters
eFrame® Liquidity
Narratives For Insurance Reporting
Solvency II
Data Internal Model ORSA
TP QRT
Assets
TIME WINDOW
DRIVEN
REPORTING
PROCESS
CONTROL &
AUDITABILITY
RSR/SFCR
Operational losses
Financial data eFrame® works with a
Data Calculators
firm’s existing systems
Cash Flow = PD x LGD x EAD
to create a repeatable,
Replicating Portfolio
auditable process for
DFA
Internal Model-based
reporting

5. Benefits
eFrame® for Insurance Solvency II Internal Model Key Features
is an elegant solution to Solvency II reporting
challenges. • Automation and workflow
Creating an automated process for Internal • Taxonomy-driven data model
Model-based reporting delivers significant • Data governance and validation
business benefits to complex insurance
organizations: • Audit trail
• Manage complex reporting demands – by • Orchestrates existing systems
establishing dependable reporting process
that works across different risk types, reporting
cycles, organisational hierarchies, geographies
and supervisory jurisdictions
• Meet challenging reporting deadlines – with Key benefits
SecondFloor’s Time Window-Driven Reporting™ • Reporting deadlines met, everytime
that ensures Solvency II reports are completed,
validated and submitted within the regulator’s • Efficient compliance
deadlines
• Trusted reports
• Reduce the cost and effort of compliance
– by automating much of the data collection
process and automatically prompting individuals
to fill any gaps, with guidance on what data to
provide
• Ensure good governance - by creating a
standard, documented reporting process for Find out more
Solvency II, with a full audit trail and traceability
for every data point supplied and every action To learn more about how eFrame® can help to
carried out in the production of the report set up, validate and manage an automated,
repeatable internal model regime for Solvency II
• Improve internal risk management – by reporting,
creating trustworthy, auditable, repeatable reports
and business analytics that can be used to guide contact us on +31 (0)20 6589 700,
internal decision-making about risk appetite and email us at info@secondfloor.com,
risk mitigation.
or visit our website at www.secondfloor.com
Chosen by the world’s leading
insurers
eFrame® is being used for Solvency II preparation
and reporting by some of Europe’s most complex,
multi-country, multi-line insurers.
Implementation Process
All eFrame® implementations can be carried out
by experienced SecondFloor consultants on a
fixed-price, fixed-date basis.
Contact us on info@secondfloor.com to request
a demonstration or to discuss particular
requirements.

6. For more details please contact
SecondFloor.
About SecondFloor
SecondFloor helps firms to comply
and produce regulatory information
efficiently, consistently. Companies
that turn to SecondFloor’ solutions
benefit from timely, complete, accurate,
traceable, auditable and repeatable
reports and analytics. Facilitating stress
testing, economic capital calculations,
and regulatory reporting in complex
environments are key elements of
SecondFloor’s credentials that have
established it as a successful enabler
of business analytics. eFrame®,
SecondFloor’s software application,
reflects best practice approaches and
project accelerators learned with clients
during years of experience. SecondFloor
is also an IBM risk analytics reseller.
Request a full demonstration
Would you like to have a personalized
demonstration of the eFrame® for
Insurance Solvency II Internal Model?
Please contact us at
info@secondfloor.com or simply visit
www.secondfloor.com