Features in Regulatory Capital Calculation Systems
for Risk Management
Applications that calculate required capital under various regulatory regimes (Solvency II, RBC, IFRS 17) and optimize capital allocation across business units.
We ask vendors to mark their product against our feature list. It is not available for all products and in some cases we have derived data from publicly available sources. The list of features follows. Vendors can add a further 10 key features of their own.
Capital Calculation Capabilities
Core computational and scenario modeling abilities for capital requirement calculation.
- Aggregation Logic Flexibility
- Customizable aggregation (e.g., risk types, business units).
- Counterparty Default Modeling
- Handles capital calculations for credit and counterparty risks.
- Internal Model Support
- Supports development and operation of custom internal models.
- Look-through Capability
- Ability to calculate capital at granular (e.g., fund, asset) level.
- Partial Internal Model Functionality
- Ability to combine standard and internal models for calculation.
- Portfolio Import Capacity
- Volume of insurance policies/assets/portfolios the system can handle in a batch.
- Scr Calculation Speed
- Time to compute solvency capital requirement per full calculation cycle.
- Standard Formula Calculation
- Implements prescribed regulatory standard formulae for solvency capital.
- Stochastic Modeling
- Capability to run stochastic simulations for loss and risk distributions.
- Stress and Scenario Testing
- Runs what-if analysis for macroeconomic and event-driven scenarios.
Cost Management
Features relating to pricing, budgeting, and ongoing system costs management.
- Automated Cost Reporting
- Dashboards and statements of system usage and incurred costs.
- Bundled Support Services
- Support, upgrades, and training included in a single fee.
- Capacity-Based Tiering
- Pricing based on data/portfolio size or user numbers.
- Cost per Calculation Run
- Average cost of a full capital calculation cycle.
- Discounts for Volume/Scale
- Bulk pricing for large portfolios or multi-entity installations.
- License Utilization Monitoring
- Tracks product license usage against maximum allowed.
- Maintenance and Upgrade Fees
- Visibility of ongoing support/upgrade charges.
- On-demand Infrastructure Pricing
- Cost of compute and storage usage is tracked and managed if on cloud.
- Pay-per-Use Options
- Flexible pricing for occasional or burst usage.
- Transparent Pricing Model
- Clear and understandable license and usage fees.
Data Integration & Management
Features supporting data ingestion, quality, and interfacing with upstream and downstream systems.
- Audit Trails for Data Changes
- Comprehensive logs of all data edits and processes.
- Automated Data Reconciliation
- Helps match records between up- and downstream systems.
- Bulk Upload Capacity
- Maximum file size or record count handled in a single batch upload.
- Core Insurance Platform Integration
- Connectors to policy, claims, and actuarial administration systems.
- Data Import Formats
- Supports a wide range of data import/export formats (CSV, XML, JSON, etc).
- Data Quality Score
- Quantitative indicator of input data quality.
- Data Validation Rules
- Flexible validation logic for raw and transformed data ingestion.
- ETL Automation
- Automated extract, transform, load for large volumes of insurance and asset data.
- Master Data Management
- Central source of truth for entities, product lines, counterparties, etc.
- Time-Series Data Handling
- Support for handling historical/versioned data for trend analysis.
Governance, Audit, and Compliance
Controls, oversight, and risk mitigation features for managing regulatory compliance and accountability.
- Approval Workflow Automation
- Configurable approval steps for report/model releases.
- Change Management Workflow
- Processes and controls for model/version changes.
- End-to-End Reproducibility
- Ability to reproduce prior calculations given historical data.
- Exception Management
- Tracks, notifies, and escalates process or data anomalies.
- Full Audit Logging
- Comprehensive logging of all key events and user actions.
- Model Governance Controls
- Track, validate, and approve capital/risk models.
- Regulatory Submission Archive
- Stores full history of submitted documents with time/date stamping.
- SOX/ISAE 3402 Compliance
- Built-in compliance support for internal controls reporting standards.
- User Access Segregation
- Granular allocation of permissions to users/roles.
- Version Control
- Track multiple versions of calculations and parameter sets.
Implementation & Maintenance
Support, installation, upgrade, and operational maintenance features.
- API Documentation Quality
- Comprehensive developer and integration documentation.
- Automated Testing Frameworks
- Pre-built automated regression/unit tests for system reliability.
- Automated Upgrade Tools
- Includes tools for scheduled and on-demand version updates.
- Configuration Management Tools
- GUI and scripting for system configuration changes.
- Implementation Timeframe
- Average time from contract to go-live.
- On-Premises and Cloud Deployment Options
- Deployable in private datacenter, public cloud, or hybrid setups.
- Plug-in and Extension Support
- SDKs and APIs for third-party module integration.
- Real-time System Health Monitoring
- Dashboards and alerts for infrastructure, calculation, and process health.
- User Training and Onboarding Support
- Comprehensive learning resources and guided onboarding.
- Vendor Support SLAs
- Pre-defined response and resolution times for support.
Optimization & Capital Allocation
Tools supporting efficient allocation and optimization of capital resources across units and products.
- Capital Allocation by Line of Business
- Ability to allocate capital across multiple insurance product lines.
- Capital Flow Monitoring
- Tracks and logs capital flows by unit/product/time.
- Interactive Allocation Tool
- GUI or dashboards for interactive allocation and visualization.
- Limit Management
- Imposes and monitors capital allocation limits configured by user.
- Optimization Algorithms
- Built-in support for optimization (minimizing cost, maximizing return on capital).
- Optimization Run Duration
- Time required for a full optimization run given data volumes.
- Portfolio Diversification Recognition
- System recognizes and quantifies diversification effect across portfolios.
- Reinsurance Optimization
- Models impact of reinsurance structures on required/regulatory capital.
- Return on Risk-Adjusted Capital (RORAC) Calculation
- Generates RORAC figures by line of business, unit, or entity.
- What-If Allocations
- Real-time adjustment of allocation scenarios and their capital impact.
Performance & Scalability
Measures and features ensuring the system processes large-scale insurance portfolios efficiently.
- Batch Processing Throughput
- Number of policies/calculations handled per hour.
- Concurrent User Support
- Number of active users the system can support simultaneously.
- Disaster Recovery Time
- Maximum restore time following system failure.
- High Availability
- Design ensures minimal downtime through redundancy.
- Horizontal Scalability
- Easily adds capacity by adding hardware or cloud resources.
- Latency for Large Portfolios
- Average time to process a large insurance portfolio.
- Parallel Processing Capability
- Can run multiple calculations in parallel, leveraging multi-core/cluster tech.
- Peak Load Handling
- System is stress-tested for extreme calculation volumes.
- Real-time Alerts for Performance Bottlenecks
- Automated alerts triggered by slow jobs or errors.
- Scheduled Job Management
- Configurable scheduling for routine tasks and calculations.
Regulatory Regime Support
Covers the capability to handle various global and local regulatory frameworks for insurance capital calculations.
- Automated Regulatory Reporting
- Automated generation of regulatory reporting templates and documents.
- Calibration Parameter Customization
- Ability to input custom regulatory parameters for stress testing.
- IFRS 17 Integration
- Seamless capital calculations considering IFRS 17 measurement model.
- Local Regulatory Support
- Configurability to comply with local jurisdiction capital adequacy rules.
- Multi-jurisdictional Reporting
- Ability to generate reports per regulation for insurers with cross-border operations.
- RBC (Risk-Based Capital) Compliance
- Supports calculations aligned with NAIC RBC and similar international standards.
- Rapid Regime Updates
- Speed at which the system can be updated for new regulatory requirements.
- Scenario Testing for New Regimes
- Support for simulating potential changes in regulatory regimes.
- Solvency II Compliance
- Ability to perform capital calculations under the Solvency II regime.
- Transitional Regulations Support
- Handles transitional arrangements during regulation phase-ins.
Reporting & Analytics
Comprehensive support for internal and external reporting, analytics, and user-customized dashboards.
- Ad-hoc Reporting
- User-defined dynamic reporting and drill-downs.
- Data Export Support
- Flexible options to export data/analytics to Excel, PDF, CSV, etc.
- Historical Comparison Reports
- Compares current and past capital/risk states.
- KPI Dashboards
- Customizable dashboard for solvency ratios, capital metrics, and risk indicators.
- Narrative/Qualitative Reporting Support
- Structured templates for adding management discussion and analysis.
- Pre-built Regulatory Templates
- Out-of-the-box templates for key regulatory filings (QRTs, NAIC blanks, forms S1/S2, etc.).
- Real-time Report Refresh
- Latency to update dashboards/reports after data changes.
- Report Automation Scheduling
- Ability to schedule recurring and periodic report generation.
- User-based Report Access Control
- Granular data visibility by user or group.
- Visualization Tools
- Graphs, heatmaps, and charts for capital requirements, allocations, and attributions.
Security & Data Protection
Safeguarding sensitive insurance, policyholder, and model data.
- Automatic Session Timeout
- Configurable inactivity timeouts for logged-in users.
- Data Backup Frequency
- Frequency at which complete data backups are performed.
- Data Encryption at Rest
- Encrypts all stored data (database, files).
- Data Encryption in Transit
- Uses secure protocols (TLS/SSL) for all data transmissions.
- Data Masking & Anonymization
- Protects sensitive data in non-production or extracted data sets.
- GDPR/Data Privacy Controls
- Features ensuring compliance with GDPR, PDP, and other privacy regimes.
- Multi-factor Authentication
- Supports MFA for improved user login security.
- Regular Vulnerability Assessments
- Conducts scheduled penetration testing and hardening reviews.
- Role-Based Access Control
- Enforces least-privilege principle for user accounts.
- Secure Audit Trails
- Tamper-evident logs for forensic analysis.
User Experience & Accessibility
Usability, localization, and accessibility features for diverse end-users.
- Accessible Design
- Conforms to accessibility standards for users with disabilities.
- Contextual Help & Tooltips
- Inline help and documentation integrated throughout the UI.
- Customizable Dashboards
- Users can personalize workspaces, layouts, and widgets.
- Intuitive User Interface
- Modern GUI with easy navigation and user-centered controls.
- Mobile Compatibility
- Optimized for tablet and smartphone access.
- Multi-Language Support
- Interfaces and outputs available in multiple languages.
- Personalized Notification Settings
- Users configure alerts for relevant tasks and milestones.
- Single Sign-On (SSO) Integration
- Seamless authentication with corporate identity systems.
- User Preference Storage
- Remembers recent activity and preferences between sessions.
- Workflow Wizards
- Step-by-step guides for key capital calculation and reporting processes.