Reporting challenges come from both external and internal requirements. Changes in external reporting requirements can often be the catalyst for finance transformation, especially where the changes are significant such as Solvency II and Insurance Accounting Change (IFRS).
Internal reporting has its own challenges with inconsistent measurements, legacy systems with poor quality data; these are also exacerbated with changes in external reporting.
Historically, insurers typically have developed the systems, models and processes separately from each other, and in many cases have separate teams for each. This results in incremental change in reporting and potential inefficiencies at every level. External reporting requirement changes require:
- understanding the reporting requirements, gap analysis will help identify areas of change
- developing accounting policies, valuation basses
- interaction with different teams to ensure capability
- analysis of the new results and understanding of the drivers behind, and behavior of the new reports
Internal reporting has its own demands, as key financial metrics in insurance organizations depend on calculated values from complex actuarial models. Problems arise from too many reports, inconsistent measurements, legacy systems with poor quality data, limited line of sight through the reports and the organization. In short, poor management information (MI) generates significant costs within finance with little added value to support the business decision making process.
KPMG professionals have helped a number of clients identify and define their key performance indicators (KPIs) to support business strategy, designing the supporting business processes to deliver these KPIs. To learn more, contact Paul Bishop, Global Head of Insurance Finance Transformation, KPMG in the UK.