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Insurance CFOs use technology to aid analysis

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Technology

A majority of insurance industry CFOs said providing better financial insight to their companies is their top priority for the next three years, according to an Ernst & Young survey released Tuesday.

The Global Insurance CFO Survey, which was conducted last year and polled 50 CFOs and finance leaders around the world, found that 74% of respondents ranked providing better insight — including faster, relevant and integrated financial analysis — as the top concern through 2020.

"With growth high on the agenda for the insurance industry, CFOs across all regions (Europe, Americas and Asia-Pacific) are increasingly investing in infrastructure and technology to promote better decision-making,” Nicola Panarelli, EY global insurance finance transformation leader, said in a statement. “This is vital if they are to achieve the business and revenue growth they seek. Against this backdrop, new accounting standards and multiple reporting bases are looming for insurers.”

Aligning finance, risk and actuarial information came in second, followed by becoming more efficient through process simplification and automation.

“CFOs are chasing faster reporting timeframes for both annual and quarterly reporting periods,” the report said. “By 2020 on average CFOs are aiming to cut the time taken to release annual financial results by 17%, and the time to produce quarterly results by 12%.” 

Insurers are still spending one month on average to close the quarter’s books and even longer to close last year’s results, the report said, a “manually intensive effort that fails to provide forward-looking business insight.”

“A lengthy close also leads to different processes for management information and management decision making,” the report said. “The numbers are often produced too late in the quarter to be used as the base for real management information in the month.” 

EY said that business partnering is becoming the key driver for aligning finance, risk and actuarial functions, with 48% of CFOs saying it was fundamental to providing insight to the business across all key metrics, including capital and risk. 

More than half of the respondents complained about siloed data, systems, timetables and processes that are not integrated. Their biggest challenge, EY said, is the lack of an integrated platform that is able to manage multiple procedures across accounting and planning activities. Such a platform would improve the timing of processes and quality of data input and output.

People will also make a difference, EY said. Building analytical skills and communication skills are the top people development priority identified by CFOs, with 46% investing in people to develop their skills.

 

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