Insurance Investment Reporting Ripe for Major Shift


Complexity and inconsistency are top challenges among insurers' financial processes

BOISE, ID - MAY 25, 2010 -In a 2009 survey by The Economist Intelligence Unit, insurance professionals were asked "What are the biggest problems with your current financial processes?" Clearwater Analytics hosted a live webinar last week to discuss the problems and solutions in investment portfolio reporting in the insurance industry. Moderated by insurance media consultant Jennifer Overhulse-King, Principal Owner with St. Nick Media, the webinar panelists were Dan Armstrong, Senior Editor at The Economist Intelligence Unit, Bret Myers, Assistant Treasurer with Group Health, and Courty Gates, CEO of Clearwater Analytics. The panel cited that a lack of investment reporting systems integration has established a problematic status quo among insurers.

According to Armstrong, the survey respondents – mainly senior executives in the finance, compliance and risk areas – identified complex procedures, inconsistent methodologies, incompatible technologies, and manual processes as among the most significant problems they face. Armstrong went on to review the benefits of standardization and automation identified by the executives study as solutions to the problems. Benefits raised by the survey respondents include enhanced data integrity, reduction in manual processes, improved accuracy, and reduced costs1.

Gates noted that "The objective of investment reporting is to produce accurate, timely, actionable information, delivered efficiently in an easy-to-consume manner to key stakeholders and constituents." In Clearwater's view, the solution is a "combination of outsourcing and powerful technology" that generates accounting, compliance, performance and risk reporting and analytics, and minimizes or eliminates spreadsheets and manual processes.

Today, insurers face a changing environment, where focusing more heavily on stricter, more accurate underwriting and on profits from investments takes precedence over the standard business model of driving profits by raising premiums. Overhulse-King noted, "This focus shift requires greater and more accurate investment oversight through investment reporting that is integrated-by-design."

Myers described the challenges faced by Group Health in pursuit of portfolio transparency and the cumbersome processes required to collect information and make sense of it in a timely manner. He provided a case study of Group Health's decision to adopt Clearwater Insurance Analytics'™integrated-by-design solution. "The financial collapse of 2008 and the resulting need for real-time investment analysis contributed heavily towards our decision to implement an integrated investment portfolio reporting solution. Since then, knowing that our data ties out across all of our reports allows us to operate with supreme confidence."

Selected Survey Highlights1 What are the biggest problems with your current financial processes?

  1. Complex procedures which are difficult to model or automate (36%)
  2. Inconsistent methodologies around the organization (36%)
  3. The need to reconcile inconsistent or redundant data from multiple sources (33%)
  4. Incompatible technologies (customized spreadsheets, databases, etc.) (33%)
  5. Boundaries between departments, with managers trying to hold on to authority (29%)
  6. Too many manual processes (29%)
  7. Too many / too restrictive controls (21%)
  8. Dependent on individuals who aren't always around (19%)

What would be the biggest benefits of standardizing/automating financial processes?

  1. Enhancing data integrity (50%)
  2. Cutting back on manual processes, decreasing risk of error (48%)
  3. Freeing staff from routine number-crunching, redeploying into higher-value activities (43%)
  4. Meeting compressed deadlines/ improving response time (34%)
  5. Reducing costs (24%)
  6. Better visibility into origin of numbers and calculations (17%)
  7. Standardization of methodologies around the enterprise (16%)
  8. Higher productivity (16%)

A complete recording of the webinar and presentation slides are available as free downloads.

1 "Strengthening governance, risk and compliance in the insurance industry" © Economist Intelligence Unit Limited 2009