IFRS 17 introduced many challenges to the insurance industry.

Up until
Key Features
inception most insurers operated without a standard accounting method;
 Highly automated calculation
now they face numerous up-hill battles upgrading their financial accounting processes

to the new uniform standard. Oracle Insurance IFRS 17 Analyzer provides  Configurable Calculation
templates for Transparency,
insurers a comprehensive solution addressing the financial accounting Auditability and Traceability

requirements of IFRS17. The solutions cater to the diverse Insurance  Seamless integration with
Oracle Fusion Account Hub
industry to measure and report the liabilities and unearned profit, per the
 Option to compute contractual
new standard. service margin at a contract
level or at cohort level
 Choice of liability calculation
ADDRESS ALL IFRS 17 CALCULATIONS ACROSS THE ORGANIZATION W ITH A methods, including Comparison
UNIFIED PLATFORM across methods and easy
transition
Insurers are known for having fragmented systems across their technology department. It’s a complex
 Synergy between IFRS 7, 9, 13
structure and each system has its own approach to handling the data that flows through, leading to a and 17
complex reporting structure that is difficult to understand. Legacy portfolios held by insurance
companies require a platform that interprets the IFRS17 requirements in order to ensure a smooth
transition to this new standard.

Oracle insurance IFRS 17 Analyzer supports the General Measurement Model (GMM), Premium
Allocation Approach (PAA) and the Variable Fee Approach (VFA) to measure the contractual liabilities
and perform the financial reporting based on the estimates computed using these methods. The
application is modular in nature and driven by user-configured logics to support the most granular level
measurement using the various methods prescribed by the standard.

Estimation of Contractual Liabilities using GMM, PAA and VFA approach

 Performing the weighted average present valuation of cash flows to calculate the fulfillment cash
flows at contract, group or a portfolio level

1 DATA SHEET / Oracle Insurance IFRS 17 Analyzer

 Automated calculations to estimate fulfillment cash flow and Contractual service margin at initial
recognition and recalculation at subsequent reporting dates based on current assumptions.

 Classification of contracts to onerous, non-onerous and other groups at initial recognition

 Disaggregation of groups into further sub dimension like annual cohorts as prescribed by IFRS 17.
The application also support further sub grouping based on user driven logic to support the financial
reporting at most granular level if required.

 Movement analysis of the contractual liabilities over subsequent periods along with the reconciliation
report to verify the analysis.

 Extensive analysis of the insurance revenue and expenses realized in a reporting period

 Maintenance of CSM and Loss component over the duration of contracts/groups along with multiple
logics to support the release of CSM during the report period.

 Impact analysis on CSM due to change in fair value of assets in case of participating contracts

 Automated calculation of loss amount using General Measurement Model in case of Premium
allocation approach

 Easy comparison of outcomes between GMM and PAA to justify the usage of PAA for certain types
of business by insurance company

User-Driven Calculation Preferences

Oracle insurance IFRS 17 Analyzer is built on a calculation platform which is highly versatile and
configurable in nature. The application supports the calculation of insurance liabilities and other
amounts required by IFRS17 for different lines of insurance business operating in different geographies.
The system is capable of handling all unique insurance business complexities in terms of their features
and translates the imported actuarial data, along with other policy information, into a format that is fed
into the contractual service margin (CSM) calculation engine in a seamless manner.

Auto Transition
IFRS 17 looks to bring new levels of transparency to insurance contracts and investment contracts
which fall on the liability side of the balance sheet. Oracle Financial Services IFRS Analyzer was
developed to give the end user the ability to choose between liability calculation methods, including
comparison across methods with easy transition, and the ability to auto switch to various methods.
Users are able to cross check using the different methods to compare the measurements, with full
traceability and auditability.

Gain Greater Control and Operational Efficiency

This new accounting standard, while daunting, opens up great opportunities for management to have
greater control and understand the organization’s efficiencies around the accounting methods. With
Oracle Financial Services IFRS 17 Analyzer, insurers can now process information down to the most
granular level to measure and report the liabilities and unearned profit with high accuracy and
performance. The analytical capabilities included in the application enable liability movement analysis
and portfolio optimization by factoring mortality, lapses, acquisitions, costs, future cash flows, credit
risk, and more. The granular processing requirements create big data challenges and are efficiently
handled using the Oracle Financial Services Analytical Applications (OFSAA) Platform to provide
accuracy and high performance.

2 DATA SHEET / Oracle Insurance IFRS 17 Analyzer

ADDRESSING THE DATA CHALLENGE OF IFRS 17

The accounting close process is data and compute intensive, especially at the level of granularity
required for the process-rich standard, IFRS 17 – an efficient and timely solution is imperative. A wide
spectrum of data is required: Oracle Insurance IFRS 17 Analyzer leverages the industry-leading
Integrated Data Model with a common data foundation across risk, finance and the actuarial functions.
The application feeds data directly into the Oracle Fusion Accounting Hub, with an out-of-the-box
connector, helping ensure the downstream processes eliminate inconsistencies across ledgers, books
and marts for confident and auditable reporting.

This solution enables the end-user to track and maintain the historical and current assumptions in an
effective manner. The historical assumptions are then used in subsequent measurements of insurance
liabilities, closing the loop of around the reuse of data: Source it once, reuse it multiple times. Not only
does the solution address the accounting close process at any given point-in-time, it can produce a
seamless projection of financial accounts into the future and can be performed at any granular level.

EFFICIENTLY COMPLY WITH IFRS 17 REPORTING REQUIREMENTS

Oracle Insurance IFRS 17 Analyzer includes a comprehensive reporting framework that supports the
various templates to showcase the aggregate and diverse reconciliation of the financial estimates. This
solution includes extensive reporting and disclosures at every level of calculation that highlight the
financial position and the assumptions made to derive the estimates. Reporting templates prescribed by
the IFRS 17 standard are available in the system to generate the overall financial reports along with
other reconciliation and breakup reports for each level of aggregation defined in the application. The
assets/liabilities and Revenue/expenses are presented explicitly in the presentation as per the IFRS 17
requirements.

The analytical capabilities of the application can assist the users to create disclosures along with the
financial reports. The reporting templates are linked with the capabilities to create analysis of the
amounts recognized in the report along with reasons of change in amounts due to the change in
assumptions.

CONCLUSION
Oracle Insurance Analytical Applications offers a comprehensive solution to address the IFRS 17
standard including calculations, data movement and reporting. Oracle Insurance Analytical
Applications are built on the Oracle Financial Services Analytical Applications Infrastructure that
consists of a unified financial services data model, analytical computations and the industry-leading
Oracle Business Intelligence platform. See results faster by leveraging award-winning solutions for
Enterprise Risk Management, Enterprise Performance Management and Customer Insight. In addition
to these industry-leading applications, third party or in-house developed solutions will similarly benefit
from this common and unified approach.

3 DATA SHEET / Oracle Insurance IFRS 17 Analyzer

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