Technology Trends Insurance Reporting Teams Should Be Watching
The disruptions of the last year just keep on coming for insurance companies. Low interest rates, climate change, and new regulatory changes, such as targeted improvements to long duration contracts (LDTI), round out the list of macro events affecting insurers.
Insurance technology is helping to soften the blow, and Deloitte Consulting LLP (Deloitte Consulting) has seen teams evolve as they integrate innovation more broadly in day-to-day work.
So, what will the “Future of Work,” as our partners at Deloitte Consulting call it, look like for insurance reporting teams? Deloitte Consulting has a few ideas.
Your future office
One disruption felt in 2020 was a shift from going into the corporate office to suddenly working from thousands of distributed offices with coworkers who looked suspiciously like houseplants, pets, roommates, or family members.
Instead of eventually going back to normal, we will probably have a new normal, said Jonathan Pearce, leader of the Workforce Strategies practice at Deloitte.
“We're going to have a much more dynamic way of working that leverages technology for digital collaboration, that brings us together across space and time, that provides more flexibility for employees to govern the where and how of work, even as we find new ways of becoming more efficient in our collaboration,” Jonathan said.
Unshackling the workforce from a single shared office could give insurance companies wider access to talent, no matter where they live. If offices can shrink their real estate footprints, they could invest the savings in digital transformation efforts.
Some teams say productivity has improved since more people started working from home, Jonathan said. "The other side of that coin is, how do we make sure that those productivity gains and engagement gains are coming to the fore, versus the Zoom burnout,” he said.
Managers will have to think about making hybrid work sustainable, including creating new norms around when employees can and should unplug, he said.
"We are trying to get team leaders to think less about checking up on people—are they logging in, are they working the hours—and rather checking in with people. Do they have what they need to be effective, do they have the information they need, the tools that they need,” Jonathan said.
New ways for finance and actuarial teams to work
For finance and actuarial risk teams, the disruptions of 2020 fueled a push for more agile, dynamic processes. The goal? Accelerating the analysis of data and delivery of insights that drive top-line growth, savings, and bottom-line revenue, said Tony Johnson, a Principal at Deloitte Consulting and a leader in its insurance practice.
Employees promptly embraced tools like messaging platforms to stay in touch and have asynchronous conversations to keep projects moving, said Tony.
Companies also are doubling down on automation to improve financial reporting, data management, and the creation of regulatory reports such as the actuarial opinion and memorandum, Tony said.
"If you're not thinking about automation, then you're actually behind everyone else in the industry,” he said. Find ways to automate the ingestion of data into a process, the process and calculations contained within, and outputs from the process that ultimately shape your business, Tony said.
What to automate
Low-value work is ripe for automation, according to Tony, and could include the data wrangling, compilation, aggregation, and reconciliation that finance, accounting, and actuarial teams need to do.
“Anything related to financial reporting is fair game,” he said. "How do we utilize more innovative techniques and tools to just shrink the amount of time it takes to complete work?” Automate basic tasks so you can focus on strategic forecasting or modeling work, which can be enhanced with predictive analytics and artificial intelligence to provide more insights, faster, he said.
When it’s time to pull those insights together into digestible presentations and reports, automate the busy work of formatting charts and choosing fonts, so you can concentrate on the all-important narrative.
4 things to look for when choosing insurance reporting technology
At a minimum, a platform for simplifying reporting should have four attributes, said Ryan Kiefer, Senior Manager in the actuarial practice of Deloitte Consulting:
1. Accessible from anywhere. No one is sure what the new normal will look like. “We do know that there's going to be a need to access your projects, your data, your analysis, anywhere,” Ryan said. “Having a cloud-based system where you can collaborate in real time is going to be important to drive insights for that end result, whether it’s a financial report or actuarial memorandum.”
2. Effective collaboration. As reporting increases in volume and complexity, companies should consider tools that streamline workflows, provide visibility into the status of upstream tasks, and show how data and documents have changed. Look for automatic audit trails, the ability to embed comment threads, and a feature known as blacklining or redlining, which highlights for you what has changed between points in time.
3. Connectivity to data and source systems. By using a centralized workspace that directly connects to data sources, reporting teams don't have to spend so much time wrangling, refreshing, and reconciling data. “You always know that your analysis is based on up-to-date data and that it's been validated. It's the single source of the truth,” Ryan said.
4. Governance. With the enhanced control environments that insurers are requiring, actuaries, financial reporting teams, and risk managers need visibility into changes in numbers or narrative, why they were made, and when. ”Having those controls built in and having that auditability is really key,” Ryan said.
“Workiva has the ability to enable the features that I outlined,” he said.
Adopting technology while considering regulatory changes
Whether you’re preparing for LDTI for U.S. GAAP reporting, IFRS 17 for international insurers, or other standards down the road, teams are managing more data and disclosures.
"When you change a paradigm or framework from an accounting standpoint, there’s going to be that much more demand from your external stakeholders to understand what movements in these balances mean and what they should glean from them,” Ryan said.
"The industry leaders are not only thinking about the external reporting that's going to be required, but really enhancing their internal management reports as well.”
You want to be able to trust the data in your reports. The less time you have to spend gathering, reconciling, double-checking, or correcting data, the more time you have to add context to the numbers that you report, he said, and the more time you have to pull together forward-looking insights.
Using technology to raise your profile
The pandemic and new regulations are giving teams a rare opportunity to push for technology to provide efficiency and new capabilities. As you evaluate new technology, Tony suggests staying focused on the outcomes you hope to achieve.
And remember to consider how technology works with your most important asset—people.
Technology that enables powerful modeling and forecasting may require teammates to have skills in storytelling and influence to use the data to serve as consultative advisors to the business, Jonathan said. Or your team may need data visualization skills to present a more compelling case for switching strategies based on the data.
Technology is an enabler for actuarial teams to be stronger, more visible partners to the business, Tony said. Meanwhile, the human capabilities that help your organization make the most of its investments in technology can enable more resilient careers, Jonathan said.
The big takeaway
COVID-19 disrupted how we work. It’s changing the work itself, as leaders focus on expanding capabilities through the use of automation to provide insights that inform the strategy of the business. That, in turn, will change the workforce and the prioritization of technical skills and human capabilities that will drive business value for organizations.
About the Author
Chris McMillan is the Vice President of Growth Solutions at Workiva. He leads the vision, strategy, operationalizing of new Workiva solutions designed to support the Financial Services industry. Prior to joining Workiva, Chris spent ten years as an analyst and process consultant and has extensive experience in software product management and application. Chris has a bachelor's degree in Mechanical Engineering from the University of Iowa and an MBA from Wake Forest University.