Case Study Two | Using TRANSKAP To Achieve Transparency

A mutual insurer dramatically improved transparency across their whole Solvency II reporting process and achieved cost-saving reductions in resource requirements by implementing MBE’s TRANSKAP system.

Problem Statement

  • A mutual insurer needed to perform a look-through analysis of its funds and Standard Formula SCR calculation in order to meet Solvency II reporting requirements

  • Asset stressing models in use were spreadsheet-based and didn’t contain the necessary look-through data, thus not satisfying Solvency II reporting requirements, neither in terms of timing nor content

MBE Solution

In order to overcome the challenges that the client was facing, MBE implemented an automated, end-to-end solution, utilising the MBE proprietary software, TRANSKAP, allowing the client to:

  • integrate the required data from various sources

  • standardise, transform and store the data

  • automate the calculation of the Standard Formula asset stresses, and the integration into existing liability models 

  • meet Solvency II reporting requirements, and provide risk MI across the organisation

MBE Approach

In order to deliver a bespoke end-to-end solution, MBE prepared for implementation by:

  • Carrying out initial analysis to gain a full understanding of the client’s asset universe, and associated complexities

  • Investigating optimal combination of data vendors and fund manager to obtain data

  • Investigating the number of data licences needed based on how many vendors would need to be enlisted to provide all required data points

Results and Benefits

  • Dramatically improved transparency across the whole process, e.g. it was revealed that the client has exposure to 67 different currencies, which meant that yield curves were required of each of these economies

  • Significantly strengthened overall Risk Framework, with consistent information across the whole risk management cycle

  • Cost-saving reduction in resource requirements and production timelines 

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