Financial and actuarial executives at insurance companies report their technology needs are not being met, according to the latest EY Global Insurance CFO Survey.
The poll of 35 senior level finance executives at global insurance organizations reveals that these departments are challenged to get data at the quality and granularity required to do their jobs most effectively, and that the platforms on which they are expected to perform their functions are out of date.
“Across the finance operating model, survey participants scored data as the least developed capability on average, while technology recorded the greatest gap between current and required future state,” EY wrote in the report. “For many insurers, the challenges are indicative of legacy multiple-source systems resulting from a history of growth through acquisitions and a lack of investment in finance systems for 10 years or more.”
EY asked insurers to rank their financial capabilities on a scale from “basic” to “leading,” with “established” as the industry average. Some respondents self-identified their technology on the lowest level -- “basic” -- and their data as “developing,” while none identified either as “leading.” A few said their capabilities in these areas were “advanced,” the second-highest entry on the scale, but tended to the low end, according to EY.
Reporting capabilities are identified as an easy target for technology-powered financial process improvement, EY says. For most insurers, reporting is a largely manual process that accounts for a high headcount, with as many as a quarter of all finance and actuarial employees working on the process. The problems with the reporting function can be explained by a lack of true systems integration after mergers and acquisitions, as well as increasing complexity of mandated reports. Insurers have responded by bolting on workarounds that hamper connectivity across the enterprise.
“By 2020, reporting processes will need to be faster, more robust and capable of providing multiple reporting views,” EY says. “This will require reporting processes and systems to be fit for purpose’ Data consistency, supported by technology that can automate processing and readily provide multiple reporting views, will be keys to improving the reporting process.”
