NÜRNBERGER’s slogan: “Protection and safety under the emblem of the castle” reflects a fundamental and wide-ranging obligation, one which naturally extends to its investment activities. With the implementation of SimCorp Dimension, NÜRNBERGER has a sophisticated platform upon which to base the processes that support investment strategy decisions – and thus for optimizing the risk-return profile. By investing in such advanced technology, NÜRNBERGER has taken a clear step towards active risk management. In addition, as a listed company, NÜRNBERGER can now readily follow both national and international accounting standards and is extremely well equipped to satisfy current and future regulatory requirements.
A changing regulatory environment
Since the Federal Financial Supervisory Authority (BaFin), in its capacity as the regulator of German insurance companies, introduced fundamental reforms of investment activities, all German insurance companies, including NÜRNBERGER, are required to adhere to markedly tougher regulation of investment policies and practices. A passed “stress test” has even become a selling point for clients in recent years. Furthermore, the transition from accounting in line with the German Commercial Code (HGB) to accounting as per International Financial Reporting Standards (IFRS) has required restructuring of portfolio management and investment business operations.
Seamless system with consistent data
The vast majority of all NÜRNBERGER’S investments are supported in their SimCorp Dimension installation. Only mortgages and real estate, which do not require daily evaluation, are not included. Since each important process step, from the purchase to the sale of a security, is controlled with the software, error-free settlement of securities is safeguarded. A sophisticated four-eyes principle, automated static and market data provision as well as a number of convenient, automated back-office processes round off the range of functionality in use by NÜRNBERGER.
SimCorp Dimension functions as the central data pool for the NÜRNBERGER securities business. As a result of using this core data repository throughout, data required across the organization is entirely uniform. All security and position data, such as security number, date of purchase, purchase price, number of units, currency and price is included. In the case of listed companies, current ratings are held too. Consequently, it is possible at any time – without programming work – to obtain aggregated key ratios for individual asset classes and groups, say with regard to the value or risk profile of the investments concerned.
Rapid implementation, lean project
The flexibility of SimCorp Dimension together with a lean project organization enabled a step-by-step implementation. Detailed planning and definition of the project scope as well as close cooperation between all parties (NÜRNBERGER, external consultants and SimCorp) were the decisive factors for the project’s success. There were three key project phases:
NÜRNBERGER used the implementation as an opportunity to redesign processes and to clean up data. Early on, settlement with HGB accounting was live in production. A key goal of terminating operation of the old legacy system was achieved with this step.
This step involved implementation of new asset management and risk management workflows. There were several focus areas: the establishment of processes for the automatic upload of market data (share prices, interest curves, currencies, etc.); the implementation of statutory reporting; the development of simulation and analysis tools; and the integration of further financial instruments (deposits, options, FX forwards, etc.).
In this final phase, SimCorp Dimension was integrated into the IFRS group project for further development. In order to facilitate the transition to international accounting, key issues were clarified in advance with auditors and operational section heads. Subsequently, accounting manuals were developed for all financial instruments held by NÜRNBERGER (equities, investment funds, participations, bonds, loans, derivatives). With the preparatory work accomplished, all that was then required was the setting of system parameters and upload of data.
Today some 40 NÜRNBERGER employees from the portfolio management, security settlement and compliance sections are working day to day with SimCorp Dimension and NÜRNBERGER is positioned to adapt readily to the changing market and regulatory environment.
AUM: EUR 27.56 billion (end of 2015)