Hi All,

Solvency 2 date are likely to postpone to Jan 2016 and it show slow legislative policymaking but what impact it will create for IT sector which working relentlessly for its pillar 3 requirement. Preparing for Solvency 2 required a lots of calculation for insurer. Calculating their asset, liability and capital to have control over risk management.

From Basel II, IT Sector has taught several facet to Bank’s IT department and Solvency 2 is similar compliance requirement. The Complexity of Modeling, Scenarios and Stress Testing is quite high for Solvency 2 comparative to Basel II. Insurer Companies shouldn’t consider this as obligation and justify an IT Solution for sake of it. It required a Strong Data Control from vendor or within organization which not only suffice the regulatory requirement but also provide strong modeling for Risk Assessment.

It might look that talking about Solvency 2 at this stage is too late but the point here I want to make is during 2011-12 lots of Technical Solution surfaced for Solvency 2 Pillar 3 Reporting requirement. Market witness Ready to go solutions which provide quick installation and generating report as per Quantitative Reporting Template (QRT). Software expenditure has increased 16% from 2012 to 2013

Even SAP also provided RDS (Rapid Deployment Solution) for Solvency 2 and partner with some large consulting firm. Overall idea is to have quick implementation in almost fixed Price and Fix time mode.It is a nice product and will benefit insurance company both compliance and Risk management perspective. While working on Solvency Project for last 2 year I realized that most of big Insurance Company either avoid or failed with Quick Fix Starter Kits and relied more on traditional ECC system with lots and lots of customize programme. I essentially feel add on part (e.g. Solvency KIT) is normally only useful if company has a standard financial report system which comprised of most of the best practice else it is burden on the IT side and hardly provide value to end user in long run. It may benefit IT and Consulting Company to churn out money but it also pushing ERP into legacy mode .The success of any quick implementation for Compliance or any other perspective lies in standardization and making Client understand to have uniform system and best practices.

Because of continues slippage from Regulatory side create a lot of hue and cry on IT investment and increasing Risk of requirement closure and for quick profit lots of immature product were launch in the market. It is the same story happened for Basel 2 Technology market.

It would be beneficial for Both Insurer and IT firm to established a strong Frameworks and provide real business value along with Adapting Compliance requirement.

Regards,

Ashish

We have an issue with Business Partner integration in FS-BP. We have a separate system for employees, agents, and contract partners.

Currently, we are planning to integrate them with Business Partner. And then we'll assign their role such as  employee(BUP003), commission contract partner(CACSA1), or Contract Partner(MKK), because they can be a same person.

I am wondering if it is the right approach to use Business Partner in SAP Insurance.

Thank you in advance.

The new wave of telematics means better value and safer roads for auto insurers and policy-holders alike.

The theory behind usage-based insurance is pretty simple. It can be handled in different ways, but they all boil down to the same thing: you pay for what you use. Crucially, it’s easily understood by consumers; a natural next step for an industry with such high cost pressures. It first evolved in the US automotive sector about 10 years ago and has spread slowly but steadily since as the costs of technology have dropped and driver appetites have grown.

Telematics are the key. Odometer readings monitor people’s mileage (pay-as-you-drive), while easily-installed sensors build on this by noting how and when they drive (for pay-how-you-drive and pay-as-you go solutions that can also offer active feedback).

The combination of real time information on acceleration, braking, speed and location means the insurance company can tell the difference between types of driver – those who take off from the lights at top speed, corner and brake hard, those who drive at night…or those who drive slowly and gently – and adjusting their base premium accordingly. Adding other data that the insurer knows about the policy holder – age, occupation and other characteristics – you can quickly see how it can be an incredibly sophisticated product. Many of the current crop of usage-based insurance products are aimed at young drivers, rewarding them for good behavior.

So that’s an idea of the service, but what’s in it for the insurer? Well, while it's in its infancy and not without resourcing costs, the benefits quickly add up. Policy holders can make big savings by signing up. Insurers who are quick to pick up early entrants and ‘good’ risks first will pay out less claims, which also leads to safer roads and fewer traffic deaths. Further use of data is a sensitive topic, but one clear fringe benefit is that with the extra data, insurers would greatly improve their fraud detection – each vehicle’s telematics effectively creating a ‘black box’ that would say where it was and how it was being driven whenever an accident might occur.

Then there’s the product and service story. User-based insurance means a completely new relationship with the customer. Especially when insurers are making first contact with young drivers and people who are on their first steps towards buying life assurance and so on. Fluctuating monthly bills means constant contact with policy holders, creating further chances for cross- or up-selling. It’s a brave new world.

Auto insurance is a hugely dynamic market. Margins are under constant pressure and competition is intense. Consumers have more choice than ever before. This is not a situation that looks like it will change in a hurry. But with the right use of technology, insurers can afford to assess risk more completely and so stand out with new pricing models and products that focus on the individual, while also collecting experience in machine-to-machine technologies that can be transferred to other lines of business.

                                                                                               - Eva Walter, Senior Solution Specialist, SAP AG

The benefits of machine-to-machine communication go far beyond auto insurance.

Telematics may have evolved from auto insurance, but it doesn’t stop with it. More specific pricing approaches and more capable, complex technologies mean insurers can handle ever-increasing amounts of data in real time. This could trigger changes that go further than the insurer-customer relationship.

Lets stick with vehicles for the moment. User-based insurance doesn’t have to be a one-way street. The potential is there to add valuable extra services, ones that don’t just monitor and maintain driver safety and efficiency, but which can also, for companies with fleets of vehicles, diagnose mechanical health, spot problems before they become expensive, recommend the most efficient routes and thus save costs in personnel, fuel, and maintenance.

Moving into houses and homes, the amount of technology we have lying around is increasing all the time. And as it grows, so does the Internet of Things. According to Gartner there will be nearly 26 billion devices on the Internet of Things by 2020. Insurers who are already engaged in a service-based approach evolve beyond being pure insurance companies and instead become consumers of information. The opportunities are massive. Not just for using data but also for changing and adapting products based on measurements.

In the future, your home insurer might offer a suite of products that offer preventative solutions as well as indemnity: sensors that help detect fire or water damage (and control emergency shut-off valves), services that back up sensitive documents securely in the cloud in the event of burglary or damage, as well as support the burglar alarm and home security.

Looking at health, life tracking, and data-collecting devices such as the Fitbit are already willingly consumed, but also cost less for the insurer and the consumer in the long run as they motivate people to stay healthy. An added user-based insurance option could offer rewards and education depending on activities and behavior. More exciting still, devices such as pacemakers could be made to transmit vital information that could prevent small problems becoming worse.

Meanwhile, manufacturers and owners of big plants also have huge amounts of data that can be used. Insurers can use this to protect customers by ensuring that maintenance is done on a regular basis and that products are stored and transported under optimum conditions and according to changing national or local regulations.

The big picture is a massive confluence of little things that, together, add up to one big thing: being able to run the world better. With effective machine-to-machine communication and, critically, the ability not just to gather but also to analyze mammoth amounts of data in real time, user-based insurance can offer helpful insights and education as well as discounts for good behavior, winning a competitive advantage in areas traditionally dominated by higher premiums. What we’ve mentioned here only scratches the surface of what is possible; the technology already exists. The next step is for the insurers to pick it up and start designing products with it.

                                                                                                                 - Eva Walter, Senior Solution Specialist, SAP

The benefits of machine-to-machine communication go far beyond auto insurance.

Telematics may have evolved from auto insurance, but it doesn’t stop with it. More specific pricing approaches and more capable, complex technologies mean insurers can handle ever-increasing amounts of data in real time. This could trigger changes that go further than the insurer-customer relationship.

Lets stick with vehicles for the moment.

User-based insurance doesn’t have to be a one-way street. The potential is there to add valuable extra services, ones that don’t just monitor and maintain driver safety and efficiency, but which can also, for companies with fleets of vehicles, diagnose mechanical health, spot problems before they become expensive, recommend the most efficient routes and so save costs in personnel, fuel and maintenance. Moving into houses and homes, the amount of technology we have lying around is increasing all the time. And as it grows, so does the Internet of Things.

According to Gartner there will be nearly 26 billion devices on the Internet of Things by 2020. Insurers who are already engaged in a service-based approach evolve beyond being pure insurance companies and instead become consumers of information. The opportunities are massive. Not just for using data but also changing and adapting products based on measurements. In the future, your home insurer might offer a suite of products that offer preventative solutions as well as indemnity: sensors that help detect fire or water damage (and control emergency shut-off valves), services that back up sensitive documents securely in the cloud in the event of burglary or damage, as well as support the burglar alarm and home security.

Looking at health, life tracking and data-collecting devices such as the Fitbit are already willingly consumed, but also cost less for the insurer and the consumer in the long run as they motivate people to stay healthy. An added user-based insurance option could offer rewards and education depending on activities and behavior. More exciting still, devices such as pacemakers could be made to transmit vital information that could prevent small problems becoming worse.

Meanwhile, manufacturers and owners of big plants also have huge amounts of data that can be used. Insurers can use this to protect customers by ensuring that maintenance is done on a regular basis and that products are stored and transported under optimum conditions and according to changing national or local regulations. The big picture is a massive confluence of little things that, together, add up to one big thing: being able to run the world better.

With effective machine-to-machine communication and, critically, the ability not just to gather but also to analyze mammoth amounts of data in real time, user-based insurance can offer helpful insights and education as well as discounts for good behavior, winning a competitive advantage in areas traditionally dominated by higher premiums. What we’ve mentioned here only scratches the surface of what is possible; the technology already exists. The next step is for the insurers to pick it up and start designing products with it.

What do you think about the issues discussed here? Continue the conversation in the comments below.

Hi Gurus,

Can any one provide configuration steps for FS-CM, Integration from FS-CM to FS CD.

Thanks in advance

Regards

Raghu

Hi

I am trying to transfer a recon key to FI thru FPG1 transaction. But I am getting the error

F5808: Field material is a required field for xxxx GL account in company Code XXXX/ xxxx GL account . Could anyone throw some light on this error and how to get around it.

Thanks

Hi Gurus,

I want to know about SAP Insurance Certification course.  Can anyone guide me how to proceed.

Regards

Raghu

Hi, We have a requirement to send reminders (via SMS, email and correspondence) to the insured, internal and external service providers at particular interval without manual intervention. As I'm not aware of any reminder functionality within claims management system, was wondering if I can use Mass Processing: IMP_CUST for this purpose. Please feel free to suggest if any other reminder functionality exist in SAP Landscape.  Any inputs are highly appreciated. Thanks, Anish

I came across a requirement where I have to add a new tab to the FS-CD transactions FPE1, FPE2 and FPE3. I was bit surprised when I could not find any BADI or Exit. Even BDT, which is quite common to Collections and Disbursements module was not available. I then figured it out that this is a special case and could be resolved through SPRO customizing. I did follow the path and successfully completed the development. Below steps will guide you to achieve this requirement whenever you come across document posting transaction enhancement.

Steps:

a) Create your custom screen using screen painter (SE51)

b) Go to SPRO

c) Navigate to Financial Accounting --> Contract Accounts receivable and payable --> Basic Functions -->

    Posting and Documents --> Document --> Screen preparation --> Include own fields and detail screens.

d) Enter the below details

       Program: SAPLFKP1 (Document)

       Application: DOP (Business partner item detail screen)  *This can change based on the requirement

       Number: 0

       Application area: V (Insurance company)

       Screen number:<Your custom screen number>                       * Created at step (a)

       Program:<Your custom screen program name>

    The below FMs are needed for data transfer

       Init module: <Your custom function module for Initialization>         

       * You can use sample FMs as well e.g. FKK_DOCT_SAMPLE_INI_OP

       PBO Module: < Your custom function module for PBO >               

       * You can use sample FMs as well e.g. FKK_DOCT_SAMPLE_PBO_OP

       PAI Module: <Your custom function module for PAI >                    

      * You can use sample FMs as well e.g. FKK_DOCT_SAMPLE_PAI_OP

e) Run the transaction and check.

NOTE:

a) For enabling/disabling the screen fields, you need to write the code in the screen program's PBO.

b) The tab name is taken care by the system and it is "Customer's Data".

Hope this blog helps you.

Ever wondered what's possible with mobile technology in the insurance industry?

I would like to make you aware of an overview webinar on mobile scenarios and solutions specifically for the insurance industry.

All information and a sign-up link is avaliable here: http://www.sap-webseminare.de/?page=espressofilter&subpage=details&webseminar=1027&language=de

THE WEBINAR WILL BE HELD IN GERMAN.

SAP Reinsurance Management  7.0 has successfully completed the Ramp-Up Phase: all customers can take now advantage of this new State of the Art – running on SAP HANA - release.

SAP Reinsurance Management (FS-RI) supports the management of assumed and ceded risk portfolios, through treaty administration for proportional and non-proportional business. The application also supports the handling of claims and delivers functionality for technical accounting. Automatic retrocession can also be processed as a standard functionality.

For the ceded business an on-line interface with the front systems (Policy and Claims Management) enables the simulation of capacity required to affront the possible maximum loss, determining which portion of the risk should be further ceded.  

State of the Art

Running on SAP HANA, SAP FS-RI 7.0 accelerates batch processes and provides the ideal platform to optimize performance and approach new business areas through innovative solutions. HANA Live content for FS-RI has been already planned and is currently under design with the aim to be roll out to the customer in the coming months. Additionally, first efforts towards Reinsurance High Performance Applications have been undertaken already.

New Release Strategy

Following SAP’s Strategic Goals: deliver our customers higher business value & innovation without disruption, starting from FS-RI 7.0 a new release strategy for early adoption of newly developed functions and features is planned.

On completion of the 7.0 Ramp-Up Phase functional enhancements to 7.0 will be delivered in Support Packages.

The new Release Strategy presents the following advantages/benefits: 

• Faster Innovation without Business Disruption - Support Packages enable the delivery of new functions in a short timeframe, making them available without the need for a new software version. (Support packages will be delivered at Intervals of 3 - 6 Monthscompared to the current development strategy which foresees new releases every 1-11/2 years)
• Lower Costs - The cost/effort required for applying Support Packages is lower than the cost/effort associated with upgrading the software to a new release version.

Language and Country Availability - EMEA, APA, AMERICAS

Customer Profile

Insurance Companies seeking for optimized risk procurement and management

Reinsurance companies seeking to optimize reinsurance administration efficiency

Four global brand companies have already decided to go for the new release. Gen Re in North America has successfully deployed the solution and three other in EMEA, namely, Munich Re, Hannover Re and Zurich Insurance Group are currently up grading to the new version. With these four customers moving towards SAP Reinsurance Management 7.0, the Ramp-Up key performance indicators (KPIs) are overachieved.

With SAP Reinsurance Management 7.0 fully delivered to the market, it is now important to turn our focus on Field execution. Now is the time to ensure that your customers benefit from the value and success of SAP Reinsurance Management 7.0. We have worked hard this year, we are proud of our achievements, and we look forward to working with you in the future.

Has any one given SAP insurance certifciation? I need to know the feedback of  the certfication?

Thansk!
Ranjit

Hi Experts:

I am very new to the area of SAP Insurance and request you to kindly let me know the sort of SAP technical platforms FS-CD(collections and disbursement) and FS-PM(policy management) use , can anyone please confirm the below:

1 . UI Technologies that CD and PM use i.e CRM-UI or WD with FPM etc

and

2. Do abapers in FS-PM and FS-CD use a BOBF(business object processing framework) architecture to access data or is it general abap where we use normal methods to access tables etc.

Thanks in Advance,

VJ

SAP Insurance Experts,

Has any one given SAP insurance certification? I need to know the feedback for that certification.

Thansk!
R.D

You could argue that the insurance industry has been historically one of the most successful business models in
the world. In fact, it has basically existed in its current form for hundreds of years.

But today, new market dynamics, new consumer behavior, new risks and new regulations are all placing new pressures
on the insurance industry.   I don’t believe that the first paragraph will hold true 15 years from now.  In almost every industry, from Music to
Banking, from Education to Manufacturing the landscape has radically changed in  the last 2 decades.   Will the insurance  industry also transform?

In this blog, I wanted to touch on the topic of how the regulator is changing insurance. 

Insurers are being forced (in part by regulators) to achieve a new level of transparency to remain both compliant and solvent.

How did we get here?

Why is there this sudden influx of new regulations? You can trace some of it back to the financial crisis, where it
became clear that banks needed more control and better regulation. They also needed better transparency to make sure they met capital requirements.

Even though it was quieter on the insurance side, the financial meltdown was a wakeup call to the industry and especially the regulator. Insurance companies had to look at themselves and make sure they weren’t heading down a similar path.

What they found was a disconnect between finance and operations.

The CFO in most insurance companies operates in a different way than in say a manufacturer.
When a CFO at a large manufacturer wants to explore a particular number, he just
drills-down to every level of detail he/she needs all the way to a goods
movement on a factory floor in Brazil.
The Insurance CFO is usually not so lucky.  Due to the enormous amounts of data in an
insurance company, it is often quite a challenge to decipher the meaning of
summarized and aggregated data.  Without being able to drill down to a specific level of detail and to make assumptions based on aggregation, regulators were concerned that this created  the same lack of transparency that contributed to the financial crisis. In
banking, CFOs were also unable to fully understand the risk of individual loans that were bundled together, and so we ended up with the subprime mortgage  crisis. Insurance is also bundled risk!

  There’s another problem: the capital
markets are no longer as easily lucrative as they used to be. In the past, insurance
companies didn't mind taking a loss on their core business because they made so
much money on the investment side. That's no longer so easy, forcing insurers
to look at their data in a new way in order to ensure profitability in their
core business.

In the past, transparency was more of an  internal consideration, rather than a regulatory requirement. But now, the regulators
are forcing more transparency.

In terms of solvency, regulators are  looking for more than just sufficient capital. Rather, they want to ensure that
a series of individual cash flows cover specific risks.  Or if they don’t, an explanation for how the
risk will be covered.   (Had we done this  in mortgage lending, we probably would not have had the financial crisis.)   Auditing
is no longer just checking to see if you’re in compliance; regulators mandate
how you connect finance to operations to capital at a detailed level. 

Not Big Data, Huge Data

The main challenge for insurance company CFOs is getting to the detail-level data in a manageable way. That’s a big
proposition, when you consider that we’re not talking about Big Data, we’re  talking about extremely huge data.

Companies that want to process that data in a meaningful way are looking for new ways of using in-memory technologies in
conjunction with new accounting valuation systems.

In order to handle this challenge, companies need to take the most powerful financial systems, the most powerful analytic
systems, and the most powerful real-time technologies, and connect them to their  core systems so they’ll be in a better position to handle the challenges that are ahead.

In the end this will benefit not only the carrier, but also the insured whose premiums will match more closely their underlying risk. 

Hello Experts,

We are working on implementation of SAP FS-PM (Policy Management) and SAP CRM. We need SAP documentation (if any) which explains middleware configuration between SAP CRM and FS-PM.

To replicate Policy Object present in FS-PM system to CRM system is our main goal. As far as our CRM system is concerned (EHP3 FOR SAP CRM 7.0), I can’t find policy object in CRM box. So the question is how can we map FS-PM policy object in CRM system and how to set replication between two systems for the same?

While doing some investigation on internet, I came across below link.

http://maarten-lamers2.blogspot.com.au/2012/01/crm-for-insurance-is-hot.html

Above link is giving basic information about ‘CRM for Insurance’. As per the link, there are two consulting packages present which are –

• Insurance Agent Workplace
• Customer Service for Insurance

Also, we can see some Web UI components designed for Policy Object.

Does anybody know about these packages? In which enhancement pack these packages have been delivered?

Your help will be greatly appreciated.

Thanks in Advance,

Prashant

Hello,

Here is the context:

At this moment in our client there are 2 group of populations: normal population and specific population (which has to be able to post some days during the month M).

We are managing posting periods through OB52 where normal population is managed through the interval 2 of OB52 and the specific population is managed through the interval 1 and has assigned  authorization group (AG1).

Also we have created different variants assigned to different company codes as each company code has different users as specific population.

The issue is that we need a 3rd group of population (for migration purposes only) to be able to post when the two other periods are already closed.

Do you have any idea how to deal with a 3rd group of population in OB52?

Thank you

Cristina

I recently returned from SAPPHIRE and heard Clayton Christensen’s presentation on Innovative Disruption based on his book, the Innovator's Dilemma. I have been a fan of Michael Porter on strategy and competition for many years, especially his book Competitive Advantage. Christensen is viewed as one of the leading successors to Porter in strategy.

The key tenet of Innovators Dilemma is that doing the right thing is the wrong thing, meaning that companies actually often handicap themselves using “good decisions” and actions.  Christensen classifies innovation into defensive, or sustaining innovations, which make good products better but don’t create new growth, and offensive, or disruptive innovations, which simplify complex products, and do create new growth.

All too often, we use “all or nothing” thinking.  However, we don’t need to "throw the baby out with the bath water." We can create an Innovation Think Tank (or Lab) and incubate projects using new approaches, technologies and processes before radically trying to make over an organization which in itself is clearly disruptive. Realistically organizations are not going to replace 20 and 30 year old business processes, cultures or applications easily.  But new products are often great candidates for innovation.

More insurers are revisiting how they develop and market new products. They are looking to leverage more external or third party data to identify key risk and market characteristics. They are revisiting their underwriting systems and their underwriting processes and re-evaluating their business rules based on true risk characteristics instead of traditional rote underwriting questions. They are using analytics to identify the relevant criteria and define business rules as part of new processes and embed them into often new applications.

Mark Breading and Denise Garth of SMA (Strategy Meets Action), recently published a research brief, Data and Analytics in Insurance in whichthey state that “analytics will be the biggest source of competitive advantage to insurers in the coming years.”  I couldn’t agree more.

Insurers who want to innovate can do so using analytics but they need to encourage and incent employees to experiment; they need to provide the analytic tools, skills development, budget and overall managerial support for selective innovation.  Simply put, they need to create culture of innovation. They can also take advantage of SAP's Design Thinking approach and workshops to help them leapfrog their competitors in innovating.  

Pat Saporito is a senior director in the Global Center of Excellence for Analytics at SAP. She is SAP’s insurance analytics thought leader. She is the author of the forthcoming book, Applied Insurance Analytics, available July 27 on Amazon.com. http://amzn.to/1mfmYiC

It is clear that the core of an insurer’s business is managing risks. But do insurers effectively identify and address all risks?

To be successful in today’s changing landscape insurers need to pay close attention to multiple critical areas of risks. Risks of losing customers or failing to provide them the right product at the right time; Risk of making decisions based on out-of-date-information; Risk being non-compliant in the face of ever-changing regulations. Now that we have begun to scratch the surface on some of the risks, what are the next steps in addressing them? Are you ready for the future of insurance?  Watch this video and learn more how SAP can help you solve your business challenges.