Automation of the IR4 Report for an Insurance Company
Our long-standing client — a global insurance company — approached LITIKO. Under current legislation, insurance companies in Ukraine are required to regularly submit reports on their activities to the National Bank of Ukraine (NBU). And that means, believe it or not, around 25 different reports.
The most challenging report to prepare is IR4, “Data on Insurance Activity Performance Indicators,” approved by Resolution No. 123 of the Board of the National Bank of Ukraine dated November 25, 2021. This is a quarterly report containing year-to-date figures and a huge number of indicators, including:
- types of insurance;
- types of policyholders;
- types of insurance risks;
- other codes.
Before automation was implemented, the insurance company’s employees prepared the IR4 report in a semi-automated manner. It looked like this.
Throughout the reporting period, the person responsible for the report (in this company, the accountant is responsible for it) receives data from specialists in different departments in the form of Excel spreadsheets. There are around ten or even more of them: by type of activity, risks, insurance contracts, insurers, reinsurance contracts, and so on. The accountant then practically manually consolidates all the received data into one large Excel spreadsheet and prepares the final IR4 report file. Some of the data is searched for independently in the ERP system.
The final report is then converted into XML format and submitted to the NBU using electronic reporting software.
As you can see, the main problem with preparing the IR4 report is that it is a fairly painstaking and time-consuming process. The person responsible for the report spends weeks preparing this document. At the same time, the mini-reports from the company’s departments also require many hours to organize the data and submit it to the accountant.
Since information enters the ERP system from different sources — some indicators are populated based on accounting data, while others are taken from documents, such as insurance contracts — the final data is simply scattered across different locations.
We are currently working on creating an interface within the ERP system that will collect all the required indicators from the system, automatically populate all the columns, and generate the IR4 report. In other words, the program itself will organize the data from the ERP system according to the indicators required for the final report.
Once all the data has been populated, the IR4 report will be generated in just a few minutes. The Excel file that was previously completed manually will now be generated automatically. If there is a need to review the details — the smaller files prepared by employees of individual departments — this can be done directly in the program.
After the IR4 report has been generated in Excel, the accountant converts it into XML format and uploads it to the NBU’s electronic reporting system.
Before our implementation, the report took several weeks to compile. After implementation, this process will take only a few hours. This is the maximum time, including an additional review of individual indicators. We believe that reducing the process from “several weeks to several hours” is an impressive result, especially nowadays, when “time = money.”
As a result of this optimization, we achieve at least two benefits:
- The time spent by the person responsible for preparing the IR4 report for submission to the NBU is significantly reduced.
- Employees responsible for preparing mini-reports within individual departments gain additional time for important analytical work and planning.
This is only the first automated report that will significantly simplify the work of the insurance company’s employees. Going forward, the client plans to accelerate the preparation and submission of the remaining mandatory reports to regulatory authorities.
