The importance of cross-functional collaboration
These change drivers, which impact every facet of the business – from processes, systems and controls to employees and investor relations – have significant overlaps and insurers cannot deal with them in isolation. But, in order to meet emerging challenges and requirements, simply adding new processes or making one-off isolated changes will not work. Systems, data, and modelling will have to improve, and the finance, actuarial, and risk functions will need to work together more closely and effectively than they ever have before to meet new demands both individually and holistically.
Timeline of new standards and regulations
All of this change is imminent: Over the next five years, leading companies will separate themselves from their competitors by fully developing and implementing consistent data, process, technology, and human resource strategies that enable them to meet these new requirements and better adapt to changing market conditions.
What’s at stake?
The insurers that wind up ahead of the game will excel at creating timely, relevant, and reliable management information that will provide them a strategic advantage. Legacy processes and systems will not be sufficient to address pending regulatory and reporting changes or respond to market opportunities, competitive threats, economic pressures, and stakeholder expectations. Companies that do not respond effectively will struggle with subpar operating models, higher capital costs, compliance challenges, and overall competitiveness.