August 12, 2014 – By: Tony Sarkis, Head of Policy and Product Strategy EMEA
The struggles many banks faced when using XBRL for the first round of Common Reporting (COREP) earlier this year provide a timely lesson for insurance firms across Europe, as they will be required to use the standard for Solvency II and must find a solution that includes both XBRL and traditional reporting capabilities.
As a three-dimensional form of communication, XBRL marks a significant break from the two-dimensional, Excel-based reports that have gone before. XBRL cube reports require the use of many more validation rules than other types of reports – a fact that caused great difficulty for many banks when submitting their COREP filings. XBRL cube reports also make the addition of last-minute adjustments much more difficult, as reporting entities must add their changes at the lowest level of their reports, rather than the top.
With Solvency II coming into force across Europe in 2016, now is the time for insurers to learn from the experiences of the banking industry. AxiomSL understands insurers will continue to need traditional reporting capabilities to satisfy other regulations, and believes they must now look for a platform that combines this functionality with support for XBRL taxonomy management and submissions.
It is becoming more apparent that insurers need a platform with embedded XBRL functionality so that all the other features required for controlled reporting – such as submission management, business sign-off, drill down and data lineage – benefit from this capability.
As XBRL reporting involves many validation rules, insurers must also look for a solution that makes it easy to see how the rules are applied and whether any of them are invalid. To make it possible to include last-minute changes to reports, insurers require functionality that allows them to make adjustments at the lowest level of their reports, which can then be rolled up to the top.
Armed with these capabilities, insurers will have nothing to fear when it is their time to begin reporting in XBRL.
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