Briefing: Moving to IFRS 17: Managing a Compressed Testing Timeline - 1pm | 30 November 2021
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Briefing: Moving to IFRS 17: Managing a Compressed Testing Timeline 1pm | 30 November 2021
Our IFRS 17 Team
Danny Gaffney | Partner | Deloitte Ireland Brendan Guckian | Senior Manager | Deloitte Ireland
Danny is a partner in the finance and performance team with Brendan leads the Actuarial Modelling Centre in Ireland, which
extensive experience in both management consulting and includes the centre of excellence for actuarial modelling,
assurance & advisory. Danny leads Deloitte Ireland’s data warehousing and business intelligence. He was the
IFRS 17 delivery and implementation team. IT Workstream lead on an IFRS 17 Implementation. He
is also a Certified Tester Foundation Level with the ASTQB.
Nick Pearce | Director | Deloitte UK Matt Bond | Senior Manager | Deloitte UK
Nick is a director in the Quality & Test Engineering practice with Matt is a senior manager in Deloitte’s insurance accounting
20 years experience in test delivery specialising in large scale advisory practice. He is an experienced IFRS 17 professional
transformation programmes within insurance. Nick has led who has been working with (re)insurers for a number of
testing on Solvency II and is currently Test Lead on large years on their IFRS 17 methodology and implementation
global IFRS 17 implementation. activities. He has also been heavily involved in the
development of Deloitte’s IFRS 17 global tools and accelerators.
2Agenda
• Recap on Test Phases
• Testing Prerequisites
• Possible Testing Approaches
• IFRS 17 Test Challenges and Strategies to Manage Them
• The Challenge of a Compressed Timeline - Market Insights
• Q&A
3Poll
Scan the QR code or go to www.menti.com and insert the code 7493 1070
What is the status of your IFRS17 project?
• Development not started
• In development phase
• Started some testing but development still ongoing
• Development complete and just testing
• Testing complete and ready for parallel run
We will share the results at the end of the presentation.
4Recap on Test Phases
System User Non
Unit Test System Test Integration Acceptance Functional
Test Testing Testing
Aim Aim Aim Aim Aim
• Unit testing aims to verify • System Testing checks the system • The aim of the System Integration • UAT would normally cover the full • Non Functional Testing aims to test
that units of code function as under test meets the functional Test is to ensure all the systems can book run and validation of the way the system operates as
per the technical specifications and design. talk to each other and pass data numbers. opposed to specific functionalities
specifications from the start to finish. within the system.
Who, What and Where Who, What and Where • For example, non functional testing
Who, What and Where • Performed by a member of the Who, What and Where • Run in the UAT environment. may assess the performance of the
• It is typically performed by business team using an • This is usually performed in a SIT • Business performs the test and system or the security settings.
the developers. independent test tool in the test environment by IT or the business. signs off they are happy with the
• Normally this would not be environment. • Might also assess the performance product. Who, What and Where
formally documented. • Number of defined test cases run of the systems for full book runs. • Tests performed against specified • Non functional testing may be
• Usually only involves small and record evidence of pass/failure. • Numbers are normally not validated test cases and results recorded. performed on its own or as part of
set of data. • Defects will be raised in the defect in this phase. • Defects would be logged and raised another phase.
• Performed in the management tool. • Some projects may try to double for remediation. • Typically performed by the business
development environment. • Regular meetings will be held with this up with UAT. • First impressions of business can be teams.
• Promote code to test the developers to explain any new • Any issues noted would be raised as important for buy in, so don’t enter • Environment dependant on when
environment if passes. defects. defects and when fixed would need it too early. this testing is scheduled compared
• Iterative cycle. to be retested. • Regression testing may be required to other phases.
• May be performed on sample • Regression testing may be required if altered systems are used for
policies which represent the full if altered systems are used for exiting processes.
book or using the full book. exiting processes.
• Regression testing may be required
if altered systems are used for
exiting processes. Note: If the transition calculations are in a different systems to your go live
solution similar phase of testing may be needed for the transition systems. 5
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070Testing Prerequisites
Preparing early for testing allows the testing stream to hit the ground running.
This may include Business Reqs,
Test Basis Functional reqs, Non Functional reqs, Data Set There may be a lot of work in
Documentation design specifications, business processes preparing a data set on which to
etc. These may vary by test phase. test.
To test resources need to be available These should be linked back to
Dedicated with required skillset. Will require, business requirements and ensures
actuaries, accountings, IT and business Test Scripts
Resources the testers perform desired tests
resources. and documents them,
Test Strategy
Strategy provides a playbook for
overall approach and objectives and
Testing Prerequisites Entry and Exit
Understand when you enter a test
phase and when it is exited. Note, the
/Scope provides clarity on what is tested and Criteria entry and exit criteria could change
when. for different phases of testing.
Need to understand how testing Defect A tool is required to log defects
Governance will be monitored and signed off. Management and track they are being
Tool remediated.
Need a Dev, Test, Preprod and Prod An Independent Test Tool will
Environments Independent allow tester understand if the
Environment for different stages of
Set Up testing Test Tool updated system is working as
expected.
6
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070Possible Testing Approaches
Sequential vs Iterative Approach
Under a sequential approach the testing does not start until the development is complete. Under an iterative approach the testing is integrated
throughout the development process. An iterative approach will flag defects earlier. Typically the choice follows the overall delivery plan. If your project
has not started testing already it will likely to be too risky to implement a sequential approach to testing as time may be too tight to wait to highlight
defects. An iterative approach is likely to resolve issues earlier increasing the chances of meeting timelines for parallel run.
Start Small and Expand
It is key to test early to identify issues as early as possible. Begin by conducting a series of smaller test on representative policies/products to identify any
defects. Once the major defects are fixed and the test passes, the testing should move onto a larger test e.g. a business unit. Different test phases may
have different approaches. A full Group test may not be done for the system test. Or if a system test covered full group testing the SIT and UAT phases may
start with Business Unit Testing/Group testing.
Policy Level Tests Business Product Test Business Unit Test Full Group Level Test
Aims to ensure tests passes for a representative Product Level test aim to highlight The full suite of products Ultimately a full book test
policy. any unusual characteristics on that under a business unit should for the entire Group should
product line. then be tested. be performed.
7
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070Test Challenges
Recommendations for IFRS 17 test challenges
Test Data System Integration
Challenge: Challenge:
• Provisioning test data at sufficient volume, date range and quality is critical to the • Integration across numerous system components including disparate sources leads
success of testing. to a risk of breakpoints in the architecture.
• Production data may not be available and creating realistic data at sufficient volume • This risk is increased when change driven by technical interpretations is delivered
can be an effort intensive and complex task. during later integration test cycles.
Recommendation: Recommendation:
• Create a test data strategy during test planning to drive decisions on the data approach • There should be tight control and review of interface designs to check data format,
Create a test data strategy during test planning to drive decisions on the data approach granularity, transfer mechanism and naming convention.
for each test phase.
• Integration testing should commence early, often running in parallel with later build
• Consider a dedicated test data team with appropriate tooling. phases to mitigate integration and functionality risk.
• The implementation of source changes into production is a key test data milestone to • May need to pass data manually initially if certain interfaces are not complete.
support effective later phase testing.
Data Processing & Reconciliation Verification & Validation
Challenge: Challenge:
• Verifying results from complex calculation logic is critical to check the solution has
• Fundamental to successful data processing is source data quality.
been correctly built against functional designs.
• Poor quality will result in records moving to exception, impacting results with significant
• Validating that the outputs are correct against external sources is key for acceptance
effort to remediate source system data. but may not be straightforward.
• ETL complexity leads to risk that data defect leakage will impact the actuarial and
accounting calculations.
Recommendation:
Recommendation: • Gain early agreement on how complex functionality will be verified.
• Source data profiling should assess the quality of source system data and undertake • Follow a rigorous development and test lifecycle for tool build.
proactive remediation actions if required. • It is important to start validation early and gradually build up scope and complexity.
• A dedicated ETL test team should automate testing to enable full volume data to be run • Create a validation framework to support SIT and UAT Acceptance Criteria detailing
through each ETL with data integrity, quality, transformations and reconciliations verified. scope and approach, together with test data, opening balance and system constraints.
8
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070Test Challenges
Recommendations for IFRS 17 test challenges
System Performance Business Engagement
Challenge: Challenge:
• There will be strict time constraints when using the solution in production driven • Effective engagement with the business can be challenging with UAT requiring users
by the Working Day Timetable. - who may be unfamiliar with the solution - to understand new processes, systems,
methodologies & test activities.
• Running full volume data through the system will cause issues across
infrastructure, code, data and require a specific skillset.
Recommendation:
Recommendation: • Engage early with the business to bring them on the change journey and ensure
adequate training is provided to users prior to UAT.
• Do not neglect NFRs, ensure that environments are capacity planned and that
coding standards cover performance. • Business SMEs should be involved throughout the test lifecycle as they have unparalleled
knowledge of the business, source systems and data.
• Undertake early performance testing to identify & resolve bottlenecks prior to
NFR testing - this will also support functional testing of large data. • The UAT approach document should clearly articulate business involvement in, and
expectations for, UAT.
Test Resourcing Transition Testing
Challenge: Challenge:
• Effective IFRS 17 testing requires expertise and experience in many test areas and also • Transition testing will be a complex endeavour for Life Insurance companies including
actuarial and accounting domains. managing dependencies into parallel run and end-state testing, as well as the
opportunity to leverage test data, tools and tests between transition and end-state
• A cross-functional team with the necessary skills and expertise can be difficult to testing.
resource.
Recommendation:
Recommendation: • Transition testing should be managed with the same principles and standards as end-
• Utilise test resource experienced with finance transformations, use specialist resource for state testing with focus given to dependencies into parallel run and across to end-state
NFT, automation and ETL testing. testing.
• Integrate actuary and accounting specialists into the test team for the entire test lifecycle. • Ensure that efficiencies across end-state and transition are leveraged including central
TMO, defect management and technical test teams (covering NFT and ETL test
• If additional BAU staff are required for Go Live hire early to onboard them during the
automation).
project phase. Use external resources if sufficient internal resources are not available.
9
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070The Challenge of a Compressed Timeline - Market Insights
UAT is being squeezed from the left and the right
2021 2022 2023
Design, Build & System Test
Transition Testing OBS Dry Run OBS Production Parallel Run
SIT UAT / Dry Run Parallel Run Support
Non-Functional Testing
What we are seeing in the market
• There is no clear consensus on the UAT / Dry Run phases, projects are choosing many different approaches.
• Timing of availability of opening balance sheet positions and full volume data a key driver of the timing of the parallel run.
• Parallel Run is typically planned to start between Q1-Q2 2022, however some projects are assessing if that could be pushed to Q3.
• Other projects are choosing to carry more risk into Parallel run by reducing the scope of testing including descoping off-cycle
processes.
• Scope options for UAT/Dry Run range from running 1 quarterly reporting period only to 4 quarters plus the YE roll forward.
• In some cases it is possible to overlap UAT and Parallel run. For example, if UAT has proved out H1 2021 but not H2 2021 the
Parallel run could proceed for H1 2022 while H2 221 is being completed by UAT.
• Other programmes have restricted UAT scope to business process testing and user familiarisation only with outputs validation
being undertaken for the first time in Parallel Run.
10
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070Q&A & Poll Results
• Please ask your questions in the Question Box
11
What is the status of your IFRS17 project? Answer our poll by going to www.menti.com and inserting the code 7493 1070Briefing: Moving to IFRS 17: Managing a Compressed Testing Timeline Thank you for attending
You can also read
