According to 2016 survey by EY, insurance CFOs believe growth is the leading challenge among insurers. CFOs will continue to lead their teams in developing and leveraging opportunities technology offers, while restructuring their approach to optimize service delivery. As the industry prepares to embrace new regulatory standards, CFO’s will focus on adapting new technologies to improve efficiency and implement strategies that allow them to accommodate future accounting trends.
Another important focus for insurance companies`CFOs will come in form of up skilling and training. CFOs will see an increase in responsibilities, as the market dictates that financial operating models must reflect on people, data and technology. Many insurers will embrace new technologies that allow integration of databases and automation of basic processes, creating new opportunities in technology development.
As insurers look to strengthen their presence in various markets, they will emphasize on the following factors:
- Growth – Insurers will pay attention to market expansion and M&As to achieve targeted growth rate as they seek to improve their return on capital. There will be a lot of focus on the digital agenda, conquering new markets and introduction of innovative products
- As insurers look to improve their profitability, CFOs must re-examine their systems to ensure maximum efficiency and cost saving measures. Work models will change to improve efficiency and create room for cost cutting measures.
- CFO’s will continue to embrace digital transformation, which will significantly influence the strategies they implement when re-organizing operational frameworks. New technologies are creating room for insurers to implement cost-cutting measures, necessitating a revision of existing frameworks. There is more pressure for finance departments to integrate actuarial, risk and finance insights to improve service delivery.
- As digital technology evolves, insurers have more access to big data and sophisticated analytic tools. There is more data to manage, and implement within organizations. Organizations will focus on making the most of the data, so it is timely and relevant to the decision-making process, especially with CFO’s.
Finance departments continually edit their priorities. Between nowand 2020, finance priorities will include:
- Accessing relevant and integrated financial analytics, to ensure improved insight into the decision making process, and applying it across all reporting bases, including the Solvency II
Aligning all risk, financial and actuarial data to ensure all key metrics, including capital and risk, receive the right insight.
- Financial priorities will emphasize more on automating activities with more emphasis on implementing and utilizing robotics. CFOs will focus on simplifying automation and reorganizing internal financial structures.
- New technology comes with increased security risks, forcing finance departments to get creative to ensure safe reporting. With pressure on CFOs to deliver reports both quarterly and annually, there is need to implement faster reporting frameworks and systems.
- New IFRS regulations (IFRS 17 is live!) require that finance implementing must accommodate regulatory changes, which include adopting the Solvency II fully.
The Future of Finance Operating Model
As the future changes, CFOs are looking into implementing a new operating model to allow for integration across the sector, in order to deliver high quality services. There are four key challenges CFOs must prepare to deal with:
- Data – May CFOs will focus in improving big data to ensure they can provide insight to business units when its needed
- Technology –In embracing technology, the focus is on overcoming legal limitations and optimizing the opportunity technology creates
- People – As frameworks and technology changes, finance teams must improve people skills to ensure their human resource evolve as the business changes
- Processes – In an effort to improve efficiency, CFOs must work towards standardizing and streamlining all processes to ensure efficiency.
You can download the study at EY´s website. The study is called “Global Insurance CFO Survey: Providing insight to support growth”