When it comes to an integrated plan, the path to high performance doesn’t happen overnight. Once you’ve considered the critical success factors discussed last week, integrated planning is often a multi-year journey that requires changes to governance, organization, process, data, systems and culture across the business. Because of this, insurers can either go big—making dramatic changes—or take more gradual steps, evolving to an integrated planning approach.
Choosing which path to take
In defining the appropriate roadmap, Accenture recommends insurers consider undertaking the following actions:
- Determine ambition level through facilitated workshops involving senior management and external stakeholders.
- Reach agreement on the key metrics for measuring and communicating performance, such as solvency coverage ratio or return on equity.
- Outline the required planning timetable, considering group, business units and legal entities, as well as the frequency of reporting.
- Articulate the required operating model to support the planning timetable and changes compared to the current state.
- Confirm an information hierarchy encompassing group consolidation, legal entities, business units, countries, lines of business and products, with a supporting methodology for financial accounting, regulatory and internal calculation including reconciliation.
- Accelerate the implementation of changes to the organization and corresponding roles and responsibilities.
- Re-engineer the existing business processes including strategy setting, business planning, financial planning, capital modeling and risk management.
- Engage in iterative learning that can improve and optimize the integrated-planning process and embed it across the organization.
- Apply data remediation that can aid in completeness, accuracy and timeliness of the data inputs for integrated planning.
- Implement technology changes designed to store model parameters, automate the production of information, consolidate and centralize historical planning information and perform variance analysis.
Reaching the destination
The benefits of an integrated planning approach encompass both qualitative and quantitative aspects. It can align strategy, risk taking and risk management, leading to an improved understanding of the risk and reward trade-off as the basis for strategic decisions. It can improve allocation of capital, resulting in enhanced return on equity. An integrated plan can also strengthen shareholder, regulatory and rating agency confidence, with a greater emphasis placed on prospective and predictive information.
The benefits of an integrated plan can be substantial for insurers—I’ve only scratched the surface above. Ultimately, an integrated plan enhances the ability of both the board and management to make better strategic decisions—a significant advantage, especially considering the challenges insurers face today.
To learn more in the meantime, download Integrating Risk and Capital Management into Strategy and Planning (PDF; opens in a new window).
Read other posts in this series:
- Before passing go: Success factors for delivering an integrated plan in insurance
- Using technology to meet regulatory compliance in insurance
- Aligning the elements: The integrated plan in action
- The glass is half full: Seeing insurance regulations as opportunities
- Navigating the insurance battleground