Refining procedures to optimize capital investments in the back office
Initially, LVM analyzed both the extension of the existing back office system by the inclusion of controlling functionalities and the introduction of completely new systems as alternatives. However, it soon became clear that the envisaged objectives would best be achieved by an integrated system platform (front to back), thus avoiding interfaces which would require intensive maintenance. In addition, particularly the capabilities of SimCorp Dimension regarding capital investment and risk controlling as well as the ever-increasing statutory publicity and control obligations were ultimately the determining key factors for the decision. Last but not least, the opportunity presented itself to streamline processes and to replace a number of single and individual labor and control-intensive applications.
Broad range of investment instruments
In order to strengthen LVM’s capital investment sector further, the objective was set to place the individual functional areas – from front office, through controlling, to back office – on a common data basis. At the same time, it was particularly important for capital investment management to be able, if possible, to map all asset classes of relevance today or in the future along the complete value chain in asset management. All functional areas should, of course, be able to access a central database with high-quality data. In addition, management should be able to react promptly to changing market conditions. This also includes a speedy and flexible overview of the respective portfolios in the direct holding and in the managed funds.
Efficiency and risk minimization also in the system environment
Before the introduction of SimCorp Dimension as the new IT platform, different software solutions were used for evaluation and analysis in the back office and in investment controlling. With the abolition of the heterogeneous system environment, not only the envisaged optimization and automation of processes along the value chain were achieved, but it also resulted in the desired audit safety based on a significant reduction of operational risk. With SimCorp Dimension, interface problems and multiple manual data input have now been overcome.
The extensive IT requirements, such as implementation of the Oracle database, operation of application, communication and database servers, connection of the ’Crystal Reports’ reporting tool, external connection to Bloomberg and LVM’s own mortgage loan sector were realized smoothly with SimCorp Dimension.
Reporting and monitoring
In addition to the goals set by LVM itself, increasing demands regarding legal reporting and risk management and controlling meant that action had to be taken. Today, data provision for Solvency II and parallel representation of accounting as per the German Commercial Code (HGB), tax accounting and possibly required IFRS accounting cannot be undertaken efficiently without comprehensive software support. A further aspect in favor of switching over to uniform software: a company which requires numerous manual steps in its procedures suffers a considerable financial burden, especially when human error creeps in. Due to comprehensive controlling functionalities and the very good and flexible reporting capabilities of SimCorp Dimension, LVM today is in a position to meet the increased reporting and monitoring requirements in a time- and cost-saving manner.
Special project model for insurers
For the software implementation, LVM chose a project model specially tailored to insurance companies. The kick-off was followed both by an interview phase and by the testing and official acceptance of the base parameterization. This base parameterization was then extended to include the individual requirements of LVM. Due to the special project model, LVM was not only able to reduce the project term in comparison to the conventional implementation method, but also realized cost savings of approximately 30 per cent.
Ultimately, all envisaged goals were achieved with the decision for SimCorp Dimension. The responsible persons at LVM know that the company must also continue to provide creative insurance products in future in order to satisfy customer wishes. Therefore, SimCorp Dimension, on account of its huge range of supported investment instruments, was and is the optimum vehicle to achieve this corporate goal. LVM now considers itself well equipped for the increasing demands in capital investment.
Name: LVM Versicherungen
Headquarters: Münster, Germany
AUM: EUR 15 billion