Despite the internal challenges of legacy systems and organizational structures as well as the external challenges of stiffer regulation and financial upheaval, the insurance industry is gearing up for growth.
The insurance-specific findings of our 2014 High Performance Finance Study paint an encouraging picture of a sector that has made strong progress in adapting to the new post-crisis climate for the insurance industry.
Over my next few posts, I’ll look at six key findings of the report in more detail, and what they mean for finance departments at insurance carriers. This week, I’ll discuss the first finding, which is that insurers continue to struggle with integration across their systems and organizational models.
The senior finance executives who took part in our survey reported that a lack of integrated applications and processes was their leading issue in addressing new risk, regulatory and compliance requirements. They told us that poor integration with existing finance and risk processes, and silo-based organizational models and governance, also pose problems for them.
What’s more, many insurers continue to struggle with a lack of integration between risk and finance—getting these two functions to work together more effectively is a priority, but is often hampered by a lack of consistent data and processes.
Unsurprisingly, regulatory change is a key driver for insurers to address integration issues. Insurers globally face a barrage of regulation aimed at strengthening their capital buffers, and ensuring that they are able to structure and manage their risk programs appropriately.
In the next post, a look at insurers’ aspirations to move to a single, enterprise-wide finance and risk model.