Martin Sarjeant, head of insurance risk solutions management and strategy at FIS, explains how the financial technology provider's agile strategy enables it to stay ahead of regulatory regimes such as IFRS 17 and LDTI and help insurers achieve their goals
How has FIS been helping insurers implement IFRS 17 and LDTI?
Both IFRS 17 and the US GAAP Long Duration Targeted Improvements (LDTI) involve significant accounting and financial transformations for our customers. In both cases, FIS was very quick to respond and amend our libraries of code and template models to reflect the calculations required. This was to ensure we were ahead of insurers and could help them to embed the new standard.
We recognised early on that data and process would be important. The IFRS 17 standard in particular requires not only more granular results but also more process automation, to ensure the results produced are correct and can be relied on.
Therefore, we enhanced our award-winning Prophet Data Management Platform to provide a full end-to-end automated offering spanning all re/ insurers' actuarial and accounting needs. With the extension of our Enterprise Accounting Solution (EAS), we remain one of the only vendors that offers a full end-to-end solution for IFRS 17, from the sourcing of data to the posting of results and production of the financial statement. However, we have also designed both our IFRS 17 and LDTI solutions in such a way that insurers can layer them on top of any existing solution.
How are insurers using cloud technology?
Nearly all of our new customers in North America are opting for FIS to manage the Prophet application in the public cloud. We also see a significant number of new and existing clients moving to the FIS managed public cloud. For an IFRS 17 or LDTI end-to-end solution, implementation times and costs are both reduced in the cloud, as the solutions can be set up quickly and matched to the right infrastructure. So, rather than several months to procure hardware and install applications, the whole implementation process will only take a matter of weeks or even days. To meet the growing demand to run applications in the public cloud, we've also seen public cloud vendors cover an increasing number of regions year on year. So, now we are seeing use of the public cloud in most developed insurance markets.
What have been FIS's key achievements in insurance over the past year?
FIS introduced support for Advanced Vector Extensions (AVX) in Q2 2019. AVX essentially provides a new way of running distributed calculations, that can significantly reduce runtimes and help models run up to five times faster.
We are also working on example models that run on Graphics Processing Units (GPUs). These alternatives to Central Processing Units (CPUs) have become more prevalent in recent years in evolving fields of advanced computing, such as artificial intelligence and encryption. Like AVX, GPUs offer clients the potential to dramatically reduce Prophet runtimes and get greater insights.
FIS recognises that data is a valuable asset for our clients and that greater granularity of data will be needed for IFRS 17 and LDTI, and so has developed a new underlying data storage technology. In Q2 2019, we introduced the Flexible Results module, where clients can write results directly to a NoSQL distributed database – which enables clients to write much greater volumes of data and at much faster speeds.
Alongside these significant technology enhancements, we have actively been helping insurers meet IFRS 17 requirements by supporting full calculations, comprehensive data management, the grouping of data and integration with the sub-ledger or general ledger – and holistic process control. We also regularly updated our libraries throughout the last year to incorporate emerging regulatory calculation requirements. And we're delighted to say that Prophet's IFRS 17 Group Calculations library has been widely adopted, across over 100 sites globally, since its 2017 launch.