SAP S/4HANA Financial Products Subledger provides a new approach to multi-valuation insurance accounting to create a more streamlined close process.

If you’ve spent any time in or around financial accounting, you know this about it: Historically, its processes have been complex and sequential. Because they’ve been complex and sequential, they’ve been time-consuming. Because they’ve comprised fragmented information from siloed sources, they’ve been fairly agonizing. And there’s more. 

Financial accounting also requires adherence to and compliance with a myriad of accounting and reporting standards and statutory branch valuations, including but not limited to IFRS 17, IFRS 9, US GAAP, UK GAAP, local GAAPs, Solvency II, and EVM. Not to mention the “what-if” analysis and management decision support that all CFO departments must increasingly provide in order to help steer the business. 

Are we having fun yet?

Those Days Are Over

The outdated complexity and arduousness of financial accounting are why Swiss Re partnered with SAP to develop the S/4HANA Financial Products Subledger (FPSL) and a new approach to multi-valuation insurance accounting. Applicable to life, non-life, health, and property/casualty primary insurers and reinsurers — for all lines of business — FPS makes short work of: 

• High-frequency registration of master data changes, business transactions, and analytical decisions
• Processing the impact of such changes on the best estimate cash flows on the current and over all future time periods
• Processing the impact of such changes in parallel for one or multiple accounting standards
• Day End, Period End as well as period-opening processing of documents

Before FPSL, Swiss Re had complicated interactions between the operational, actuarial, and financial worlds, requiring it to juggle multiple data sources, reconciliations, and calculations.  

FPSL starts with a simple, verifiable baseline consisting of premiums minus claims and other expenses. That baseline is fed into FPSL, which calculates all other variables simultaneously, not sequentially — and automatically, not manually. And it shows different results for every applicable GAAP and reporting standard transparently and auditably. The result? A shared approach for the operational, actuarial, and financial worlds that takes some of the pressure out of closing processes by using event-driven triggers to schedule as much as possible before close even starts. And that can only mean one thing - a faster close. 

Since FPSL was just introduced at the end of June, people have wondered if they can afford to explore FPSL. We can only wonder if they can afford not to.

For more information on SAP S/4HANA Financial Products Subledger click here.