Long Duration Targeted Improvements Powered by SAP S/4HANA for Financial Products Subledger

Insurers preparing to comply with Accounting Standards Update No. 2018-12 have many challenges. While the goal of Long Duration Target Improvements (LDTI) is to make financial statements more compatible and transparent, the execution of these new rules is highly complex and impacts actuarial, finance, and IT teams in significant ways. But it also provides an opportunity to reevaluate your processes and upgrade your technology.

Here at msg global, we are working with insurance experts and auditors to provide pre-delivered content to manage the calculations, accounting, and reporting requirements for LDTI utilizing SAP solutions.

SAP S/4HANA Financial Products Subledger (FPSL) provides the backbone, serves as the operational data warehouse, and is the one source of truth for accounting, reporting, and analytics.

SAP Profitability and Performance Management (PaPM) provides the calculation engine for the three key LDTI calculations:

1. Liability for Future Policy Holder Benefits
2. Market Risk Benefit Calculation
3. Standard Amortization for Deferred Acquisition Costs

And with the addition of SAP Analytics Cloud, presentation and disclosure of financial information can also be accommodated.

All three solutions work in harmony to provide ONE integrated solution to the LDTI challenge.