A new Ernst & Young survey of insurance CFOs has revealed that insurers are looking to place a greater focus on data management and analytic capabilities to spur growth in the next five years.
The 2014 Global Insurance CFO Survey
reveals the top priorities for some of the top priorities for insurers with 66% of respondents saying that achieving growth, expanding into new markets and expanding through merger and acquisition activity was one of the top three priorities to 2020.
54% of those surveyed said that managing costs and improving profit was among their top three and 51% noted that responding to regulatory change is a top concern.
David Foster, EY
EMEIA finance change leader, noted that the industry is still looking to grow despite the soft market conditions.
“The insurance industry has shifted toward growth, even while the market has remained soft and highly competitive.
“To meet new competitive pressures and regulatory challenges over the next decade, CFOs increasingly will be called upon to become better business partners and provide more strategic insight and advice, using efficient reporting, enhanced analytics, and the right people and processes in the right locations to help their organizations grow and succeed.”
Two-thirds of those surveyed ranked data and technology among the top three challenges facing their departments with 21% noting the quality of their data was their biggest obstacle to success.
“Issues around the quality of data have been and continue to be an area of focus for insurers,” said Sandy Sposato, principal, Financial Services Advisory at EY
“With new regulatory reporting requirements impacting a number of organizations, accurate, reliable data is even more important. CFOs recognize this is an issue and are focusing their spend in this area as well as improving the overall infrastructure to support the business for the future.”
All surveyed CFOs noted that in order to deliver more value and become better business partners, investments must be made in the finance and actuarial departments of insurers. This includes improving data management, analytic capabilities and enhancing their teams to advance decision support and performance management capabilities.
“The competitive market will not become any easier by 2020. For finance and actuarial departments to provide strategic decision support that will help insurers grow, operating models and processes will need to undergo improvement,” Foster warned insurers.