Several drivers of change, including new and rigorous expectations from regulators and standards setters, increasing demands for more relevant and useful information, improvements in analytics, and the need for operational transformation, are compelling insurance companies to re-evaluate and modernize all aspects of their business model and operations.
PwC’s approach to insurance modernization focuses on developing a forward-looking, future-proof view and holistically addressing the combination of forces that are impacting the existing insurance operational model. We do not believe that insurers will benefit by addressing them one by one in a tactical and reactive manner. The impacts of each influence are pervasive throughout actuarial, finance, risk, marketing and distribution, IT, and other functional areas. This means that key functional areas need to work together to create an insurance operating model that is nimble, agile, future-proof and can help companies manage and adapt to change as part of standard business practices.
Top Insurance Industry Issues in 2015
Key focus areas:
The way life insurance companies determine reserve amounts is changing profoundly. Principle-based reserving (PBR) places a much greater emphasis on the assumptions that feed the reserving models. In the past, regulation prescribed most of these assumptions, but PBR puts the onus on the insurer to determine assumptions that are reflective of its own business rather than broad industry averages. This paper describes the changing environment, PBR’s implications, and what they mean for the models that companies use to determine reserves.
PwC helps insurers prepare for future operational, business, regulatory and market demands by focusing on how to improve finance, operational, actuarial and risk functions. We have: