Other parts of this series:
In the first post in this series, we looked at some of the overall findings of Accenture’s large-scale survey of insurance industry CFOs, conducted within the context of a multi-industry CFO survey.
We found that insurance CFOs were eager to take on the challenges of digitalization. One central issue, however, is the ownership within the organization of the data needed for sophisticated analytics and improved decision-making. Insurers have always relied on data to assess, calculate and transfer risk, but now data is becoming a resource to create new value and strengthen processes within the existing business.
Our research indicates that insurance CFOs are taking steps to exert greater control over data across the enterprise. Well over half (57 percent) say that finance should take a leading role in identifying and managing control of the most critical data. That’s significantly more than in other industries and, compared with those in other sectors, they’re more likely to think of the finance function as the rightful owner of the organization’s data. More than eight in ten insurance respondents (82 percent) are already starting to take ownership in this way, compared with 75 percent in banking.
This trend may be attributable in part to the traditional importance of data in insurance, along with the complexity of accounting within the industry. The finance function’s oversight of data can deliver the quality and specificity needed for business decision-making needs, as well as for industry-specific accounting challenges such as deferred acquisition costs.
New challenges arise, however, as insurers seek to develop innovative business models and compete against industry and non-industry rivals. Insurers are combining heritage internal data with new external data sources, including application programming interfaces, wearable technologies, the Internet of Things, and telematics-related “black boxes.”
Much of this data is unstructured, in unfamiliar formats, or is hard to trace. Finance can oversee that any use of combined data is carried out effectively and with a focus on business outcomes. In fact, more than one in three (35 percent) respondents to “The CFO Reimagined: from driving value to building the digital enterprise” survey said the finance function should be responsible for developing “best practices” for combining different data sets. This trend is expected to accelerate as insurers start to work with larger and larger volumes of external data.
In the next blog in this series, we will look at another challenge facing insurance CFOs as they shepherd their organization’s move toward digitalization: the need for new talent.
To learn more:
Click here to download the full multi-industry study on the changing role of the CFO.