In my first post about the insurance version of Accenture’s 2014 High Performance Finance Study, I looked at how insurers are continuing to struggle with integration across their systems and organizational models.
The second finding of the report is that insurers aspire to move to a single, enterprise-wide finance and risk model. As with the desire for better integration of systems and organizational models, regulatory pressures and demands are the driver for this aspiration.
Most respondents report that they have been relatively slow to centralize their finance and risk resources. Many have multiple operating segments, each with their own risk and finance groups, and this has made integration challenging to achieve.
Currently, just 12% of insurance respondents say that they have a single, enterprise-wide finance and risk repository. There is, however, a clear appetite in the industry to change. For most, a single, enterprise-wide risk and finance repository is their target model for two years’ time.
Greater centralization would have many benefits, including more efficiency, and the ability to serve customers better and on a timelier basis. But moving towards greater centralization, particularly in a timeframe of just two years, is an ambitious goal.
The CFO must play a key role in driving this agenda, and serving as the “architect” who will build the business case and align stakeholders around the change process. Next time, I’ll look at the challenges of complexity and regulation.