Aon Benfield, a reinsurance intermediary and capital advisor, has launched a Solvency II-focused version 5 of ReMetrica—its financial analysis tool for capital modeling. ReMetrica has evolved to help reinsurers meet the proposed regulatory requirements under Solvency II and to enable more effective year-of-account reporting for the Lloyd’s market, the company says.

The new Solvency II-focused components are designed to enable reinsurers to enhance their internal models and deliver accounting reports for regulators. They include:

Fair Value Report: A financial reporting component tailored to "fair value accounting," including fully discounted balance sheets, premium provisions and market value margins

Premium Provisions: Generates the additional reserve items relating to unearned business and non-incepted obligations which are required for fair value accounting

Reserving: An enhanced version of the reserving logic, which uses a recognition pattern approach to allow balance-sheet to balance-sheet risk to be captured in a model calibrated on an ultimate-risk basis

Aon Benfield worked with a group of insurers, predominantly from Lloyd’s, to shape enhanced functions for underwriting year reporting to meet the market’s requirements. The company believes this will allow users to simplify existing models without reducing accuracy. Additionally, the enhancements allow smaller, more compact models to improve ease of use and deliver the following:

• Calculation of reserves by underwriting year

• Allocation of reinsurance premiums and commissions by underwriting year

• Underwriting year reporting components

In addition, a new reporting component for capturing counterparty-level reinsurance default risk has been developed, as well as improved tools and interfaces including Wizard-style reporting.

“Solvency II has been a key trigger in the next step of ReMetrica’s evolution," says Paul Maitland, head of ReMetrica at Aon Benfield Analytics. "We’ve listened to and worked with both our clients and the regulators to adapt and enhance the software. It helps reinsurers meet the proposed regulatory requirements while continuing to test different strategies and make informed business decisions.”

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