I look at findings five and six of the insurance version of Accenture’s 2014 High Performance Finance Study in my concluding post in this series.
An encouraging finding this year is that insurers are maintaining a strong focus on growth. Over the past two years, surveyed insurance companies have had a strong focus on cost reduction. When asked about the initiatives that they had implemented over the past two years, cost-cutting measures dominate the list.
Despite the attention to cost reduction activities, a vast majority of insurance respondents continue their shift towards growth. CFOs cannot, however, look at their business through a single lens. Every insurer has more mature, traditional lines of business with more predictable revenue streams, and emerging products that offer good prospects but are inherently uncertain.
This requires finance leaders who can maintain cost discipline on the more mature parts of the business, but allow a suspension of this focus for more promising growth opportunities. At the same time, CFOs need to be able to react quickly to changing situations, tightening expense controls if premiums are not emerging as expected, or loosening them if a promising idea requires more investment to achieve scale.
Our final finding is that insurers are ramping up their investment in cloud, big data and analytics. There are large variations between P&C and life in their enthusiasm for these technologies, however. For example, a larger proportion of life insurers than P&C insurers will be investing in software as a service and cloud technologies over the next two years.
Investment appetites for big data and analytics are also high overall, but are particularly large among the life insurance respondents. Eighty-five percent of insurers say that they are applying big data and analytics to accelerate insights for better decision making, compared with 72 percent of respondents from other industry sectors.
CFOs are often involved in assessing these technologies, but only a minority of respondents drives decisions and actions.