Digital technology is not only driving a transformation in how firms do business, it’s transforming executive roles too. Chief financial officers (CFOs) across every industry are experiencing an evolution in their role that is strengthening their position at the boardroom table and at the right hand of the chief executive officer (CEO). But that doesn’t mean the demands of this role are the same for all CFOs. There are nuances within industries and sectors.
As I explained in my previous post, within financial services there are differences between the banking and insurance sectors in terms of the challenges reimagined CFOs face. In this post, I address issues that are specific to the insurance sector.
The data kings of the industry
Compared to other financial services verticals, you could say insurance is the leader in terms of its access to and use of data. Given how crucial to organisational success data analytics has become in the digital era, that’s a special advantage to insurance CFOs―and they are embracing it. For example, Accenture’s survey of finance professionals indicates 82% of insurance CFOs willingly take ownership of their firm’s data, versus 75% of banking CFOs.
However, from a broader technology adoption perspective, the insurance sector has not evolved as quickly as other verticals. It’s been slower to embrace change and come to grips with new technology. As a result, it’s not considered particularly attractive by emerging talent. Still, there is growing enthusiasm among insurers for integrating disruptive technology into the workflow and insurers are very comfortable with managing data.
The finance function, with the CFO at the helm, has the opportunity to take advantage of these strengths in leading the charge toward more robust digital transformation and asserting finance’s role as the data owner and driver. Firms that can overcome resistance and the barriers of cost and information security, and can turn the tide toward faster cloud adoption, will burst ahead of the competition.
How HR can help insurer CFOs drive the transformation
Attracting and retaining the right talent will be critical. As the financial services industry data leaders, the insurance finance function should be staffed with data analysts who have the special skills to conduct sophisticated data analytics. Similar to the banking sector, hiring and upskilling enough of the right talent to execute advanced analytics will be the key challenge.
In the era of the reimagined CFO, HR also plays an important role in championing the CFO as a strategic change agent. The ability to break down organisational silos and collaborate across departments will become essential competences. The insurance CFO should not only be a superior data analyst, they should also possess the interpersonal skills that can drive coordinated efforts to achieve the firm’s goals.
In my final post, I explain in broader terms how firms, their HR teams, and their CFOs can work together to accelerate the evolution of the CFO role.
For more information about the reimagined CFO, please see Accenture’s report: From Bottom Line to Front Line
Accenture has also produced an industry-specific report for Insurance.