Virtual Actuary’s modelling software for IFRS17

Why do you need IFRS17 prototype software?

When you start your IFRS17 journey, it quickly becomes clear that an IFRS17 prototype model is fundamental to your implementation activities. The three major processes you’ll need to complete are to validate your IFRS17 accounting engine with dummy data (e.g. structured test cases aimed at specific items), perform dry-runs (using real company data), and do transition calculations (which you might or might not want your IFRS17 accounting engine to actually perform). You’ll also need to complete a list of smaller activities involved with these use cases, such as:

• performing ETLs to get the data in the required input formats,
• generating test cases,
• measuring the coverage obtained for different test cases,
• automatically comparing two sets of results to find differences,
• producing a solid audit trail for your validation activities, and
• rolling forward CSM calculations over many years to produce your transition values when IFRS17 goes live (which could be quite a laborious task if not automated).

We’ve created IFRS17 software that is perfect for all these use cases.

Its main aim is to lessen the resource strain on your IFRS17 project, save you from reinventing the wheel, and bring the latest technology to the table to solve your complex problems simply.

In this article I’ll talk you through our IFRS17 prototype software to explain some of the benefits it brings to your laborious IFRS17 activities.

What are the biggest issues with IFRS17 prototypes?

First we’ll cover the main issues we found with the IFRS17 prototype solutions on the market. Then we’ll explain how we overcame them and why it’s such a pleasure to work with our IFRS17 prototype software.

ETLs and data input formats

ETL functionality and how data is entered into the IFRS17 prototype is a major obstacle when running an IFRS17 prototype. Performing data transformations alone is quite a strenuous task. Imagine doing that on top of figuring out and understanding the input format into which you should transform the data!

Configuration and flexibility

The configuration and flexibility of the prototype to perform calculations using company-specific IFRS17 methodology is very important when considering an IFRS17 prototype model. How will you need to adjust and configure this model to perform the IFRS17 calculations exactly as specified by your company? How long will this take? Will the solution still be robust and slick after you make all these changes to align with company methodology? It’s unlikely that the prototype will perform as optimally after the adjustments as before.

Traceability of results and debugging

The traceability of results to the underlying calculations such that the user can easily see how the results were created is essential for debugging strange values, as well as fully understanding and learning the internal workings of your IFRS17 prototype. If the solution is a black box, or not very flexible in explaining the underlying calculations, this could hamper the progress of your IFRS17 project and might even lead to erroneous results.

How did we overcome these obstacles?

In this section we’ll explain how we overcame the main obstacles with using an IFRS17 prototype, and then we’ll discuss the main points in more detail.

We have built-in ETL functionality

Instead of asking for data to be in a set input format, our software asks you to point us to where the data your system, the actuarial models and accounting systems, produced is stored. The system then uses its tentacles to pick up the data from the stored locations and defines where the variables in the data files should go in our system for upstream use.

This essentially takes away the need for you to do any ETLs, as our system just takes the data you have readily available.

Very flexible configuration settings

The system’s strong point is flexibility. It comes with standard IFRS17 methodology built in, but you can also specify exactly which calculations should be performed over the different model runs produced by your actuarial models.

So you can tailor this software to run results based exactly on your company methodology and how your IFRS17 accounting engine will produce results.

Complete end-to-end traceability of results

Yes, the solution makes use of modern technology, but it is far from being a black box. All the IFRS17 calculations are converted and exported to Excel as live formulae, revealing the full audit trail underneath. The heavy lifting and data preparation is configured by the user and then performed by a back-end written in Python.

The dashboard produced as a result of running the software also enables you to zoom in on different figures, pointing you to where the figures are calculated and which inputs were used to calculate them.

Our IFRS17 software’s system architecture

Here’s an overview of our software’s functionality, highlighting all the above points and a few more items we haven’t mentioned yet.

Where can you use our IFRS17 software?

The figure below gives you an overview of the possible use cases for our IFRS17 software on your IFRS17 programme.

Validation

The software has a built-in test-case generator, flexible configuration, and the functionality to map two sets of results to identify the differences between them. The software can also be configured to deal with the laborious data transformations and ETLs of test-case data into the format required by your IFRS17 accounting engine.

Dry runs

If ETLs are set up in line with company data (something that’s already done as per the validation bullet above), then company data can be run through the software to perform dry runs and comparisons with the IFRS17 accounting engine using live company data.

Transition

After using this tool for validation and dry runs, the “logical next step” is to use this software for getting the transition values. It automates the transition calculations and takes away the onerous process of manually carrying forward the CSM over multiple years. If the data is fed in, transition methodology specified and transition period configured, then this tool can automatically roll forward the CSM calculation over multiple years at the press of a button.

Financial impact assessments (FIA)

Some companies haven’t started with validation yet and would actually like to perform FIAs. This tool is perfect for FIAs as it lightens the burden of performing ETLs and it has a configurable dashboard built in, which can produce valuable management information and comparisons to the IFRS4 results.

Management information

As noted in the above bullet, our software has a built-in dashboard that you can configure to produce valuable management information on key metrics and KPIs.

Schedule a demo

I was pleasantly surprised by this software and can really see the value of combining software-engineering resources with actuarial resources. If you would like to know if the software can add value to your IFRS17 project, get in touch with me on LinkedIn for more information and a demo so that you can explore its functionalities further. Our software is competitively priced and designed from the ground up to save you time and resources. I’m confident that it will take your IFRS17 project to the next level and provide additional technological skillsets to speed up your IFRS17 implementation project.

Need help on your IFRS17 implementation project? Then contact me on LinkedIn to see how we at Virtual Actuary can assist.

Did you like this blog? Then follow me and Virtual Actuary on LinkedIn for more IFRS17 blogs and keep an eye out for the next one.

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