Introduction
About Oracle Financial Services Analytical Applications (OFSAA)
In turbulent markets today, financial institutions require a better understanding of their risk-return while strengthening their competitive advantage and enhancing long-term customer value. Oracle Financial Services Analytical Applications (OFSAA) enable financial institutions to measure and meet risk-adjusted performance objectives, cultivate a risk management culture through transparency, lower the costs of compliance and regulation, and improve insight into customer behavior.
OFSAA uses industry-leading analytical methods, shared data models, and application architecture to enable integrated risk management, performance management, customer insight, and compliance management. OFSAA actively incorporates risk into decision-making, enables you to achieve a consistent view of performance, promotes a transparent risk management culture, and provides pervasive intelligence.
Oracle Financial Services Analytical Applications delivers a comprehensive, integrated suite of financial services analytical applications for both banking and insurance domains.
About Oracle Financial Services Analytical Applications Infrastructure (OFS AAI)
Oracle Financial Services Analytical Applications Infrastructure (OFS AAI) powers the Oracle Financial Services Analytical Applications family of products to perform the processing, categorizing, selection, and manipulation of data and information required to analyze, understand and report on specific performance, risk, compliance, and customer insight issues by providing a strong foundation for the entire family of Oracle Financial Services Analytical Applications across the domains of Risk, Performance, Compliance, and Customer Insight.
About Oracle Insurance Accounting Analyzer Application Pack
IFRS17 is an international norm that supersedes the current reporting standards, IFRS 4. The new standard provides users of financial statements with a new perspective on the financial accounts of insurance companies. Oracle Financial Services Insurance Accounting Analyzer application enables insurance companies to adhere to the disclosure requirements as proposed under IFRS 17 with an ability to compute Contractual Service Margin and Net Liabilities.
Insurance companies need to identify the risks that arise from the insurance contracts along with the calculation of assets and liabilities. IFRS 4 was introduced in March 2004 and was intended to provide limited improvements to accounting for insurance contracts. IFRS 4 permitted companies to continue previous accounting practices for insurance contracts but did enhance the disclosure requirements.
IFRS17 released in May 2017, supersede the current IFRS 4 reporting standards on accounting for insurance contracts and has an effective date of 1 January 2021. The new standards provide users of financial statements with a new perspective on the financial accounts of insurance companies. IFRS 17 introduces an approach that tackles some challenges in accounting for insurance contracts currently addressed inconsistently when a company applies IFRS 4. Some of the benefits of the IFRS17 are:
- IFRS 17 provides updated information about the obligations, risks, and performance of insurance contracts.
- Increased transparency in financial information reported by insurance companies will give investors and analysts more confidence in understanding the insurance industry.
- Consistent accounting for all insurance contracts based on a current measurement model.
The Oracle Insurance Accounting Analyzer application follows the IFRS 17 standard diligently and enables insurance companies to adhere to the disclosure requirements as proposed under the IFRS 17 standard, along with an ability to compute the Contractual Service Margin and Net Liabilities.
The IFRS 17 standard requires insurance companies to have a consistent accounting standard for the insurance contracts that ensure timely recognition of losses in the book of accounts. Insurance companies are required to identify and report the fulfillment cash flows and contractual service margin at every reporting date, based on the current market conditions. The Oracle Insurance Accounting Analyzer application helps organizations in arriving at the insurance obligations, and insurance contract liabilities reported on the balance sheet, by using different methodologies for a set of portfolios and by assessing the net liability for every insurance contract.
The IFRS 17 standard requires the entities to perform initial recognition of insurance contracts and execute periodical re-assessment of the insurance liabilities, based on the current assumption sets. The insurance liabilities are presented in every reporting period and those reflect the change in the amount since inception. The profitability of insurance contracts is amortized over the duration of the contract, based on the services provided.
Note:
By default, the financial elements dimension member code is numeric. If you require it to be an alphanumeric code, then you must follow the post-installation activities as described in the Configurations to use the Alphanumeric and Numeric Codes for Dimension Members section in the AAI Administration Guide. This is a one-time activity and this decision must be taken before the application is used. Changing it from numeric to alphanumeric while using the application is not supported. Note that in the case of an integrated setup, the decision for numeric and alphanumeric codes must be taken before all integrated applications are used.