Imagine a future in which finance can monitor business performance in real time and provide results to stakeholders where and when they need them. Imagine it can close the books in two days and fully explain what drove the results. And that it can identify profitable customer segments and guide sales to those customers, or scan the horizon, preparing contingency plans to address the impact of things like market volatility. In essence, imagine the business benefits of having a finance function that provides timely, actionable insight and is a key partner to strategic decision making.
Our view is that this future is possible today, and that modernised insurers with this capability will significantly outperform their peers. IFRS 17, if looked at as more than merely a compliance requirement, provides the business case to start building this finance function of the future now.
IFRS 17 is not just a new accounting standard for insurers – the changes it requires will affect almost every stakeholder and functional area, and many systems and processes, which is why it makes sense to use the standard as a springboard for broader change. And when thinking about the functionality the future will demand, highly developed information analytics will become the key determinant of competitive differentiation.
If you believe that the finance function must change, the next question is how to make it happen. How exactly can the finance function of the future satisfy various stakeholders, and also gather, analyse and explain metrics – both traditional inputs and new data – and participate in more complex planning and budgeting?