Change doesn’t have to be daunting: How Connected Planning proves valuable to insurers for compliance and beyond
AUTHOR
The insurance industry has experienced a seismic shift in recent years, driven by the accelerating pace of technology adoption and changing consumer behaviors.
Simultaneously, keeping up with regulatory changes, such as the implementation of IFRS 17, has added an additional layer of complexity for insurers. This has led to an increased need for flexible, scalable technology – and it’s become more than just a nice-to-have benefit, it’s now a necessity. As insurers navigate this dynamic environment, investing in innovative solutions will be essential to adapt, comply, and thrive in today's competitive insurance landscape.
Navigating external market pressures
The past three years alone have confronted insurers with challenges of profitability. Inflation has raised claims costs and expenses, dampening business volumes as consumer purchasing power scales back. Simultaneously, geopolitical disruptions, including the war in Ukraine, have disrupted the global supply chain, impacting the availability and cost of goods.
Recent research from McKinsey estimates that rising prices have contributed to an approximate $30 billion increase in loss costs for P&C insurers in 2021 alone, a historical marker of loss for the industry.
Catastrophic weather events also resulted in a surge of insurance claims that accounted for $50 billion in global insured losses from natural catastrophes in the first half of 2023.
These external pressures have overwhelmed insurers with the burden of covering unexpected claims costs. Pair this with the complexity of navigating new regulations like IFRS 17, and insurance companies must modernize their financial planning to stay one step ahead.
With advanced forecasting capabilities on a flexible and connected platform, insurers can account for rapid change and cater to evolving market conditions. Modern planning platforms allow leaders to evaluate multiple “what-if” scenarios using real-time data to proactively identify areas they can profit from or course correct quickly when an external event occurs.
The legacy tool conundrum
Legacy tools and spreadsheets lead to manual, time-intensive tasks and error-prone data. Take, for example, RSA Group, one of the world’s longest-standing general insurers. The finance team dealt with tedious spreadsheet-based, nine-month-long financial planning cycles for many years. Not only were these cycles riddled with data quality issues, but they were siloed and fragmented across the entire company. As a result, significant time was spent cleaning and managing data rather than gaining valuable insights from it.
Similarly, the financial holding company Markel relied on a legacy solution that was so limited in its capabilities that the finance team was prone to work with spreadsheets outside of the system for complex calculations and reporting. Generating comprehensive forecasts through data consolidation proved challenging with a siloed data architecture. This restricted user experience and introduced the possibility of human error. The financial team at Markel knew they needed a complete financial planning transformation to keep up with real-time data.
RSA Group and Markel are not alone in this experience. With little or no automation, lack of integration, and inadequate scalability, legacy tools pose limitations that can hinder insurers from delivering timely and accurate forecasts and meeting compliance requirements.
One solution to drive full transformation
A complete top-to-bottom transformation is necessary to streamline financial planning operations, including cash-flow modeling and forecasting, aligning planning to reporting, and allocating granular costs. Through connected planning technology, insurers can leverage scenario modeling and forward-looking reporting functionalities to enable better decision-making and ensure compliance.
For RSA Group, connecting different teams to the same data source was of enormous value when researching a financial planning solution. The Anaplan platform helped the company drive down tedious data management. What once took nine months to conduct their annual financial planning process was reduced to only five months.
With Anaplan, RSA Group experienced a 50% improvement in productivity from the workforce planning team by trading their manual spreadsheets for connected plans.
Anaplan helps insurers simplify data management, increase collaboration through a single platform, and provide agile performance management. For instance, Markel leveraged Anaplan for their much-needed digital transformation journey, enhancing efficiency and agility in their end-to-end financial planning environment.
With an ecosystem powered by the Anaplan Data Hub, Markel integrates cleansed, aggregated data from their general ledger, human capital, and data relationship management systems. The result: a dramatically more efficient finance department, saving 6,000 work hours annually.
Meeting the future of financial planning with advanced capabilities
Staying competitive and securing long-term profitability in an uncertain economy can be achieved through connected planning. Anaplan offers a planning environment that leverages artificial intelligence and machine learning to provide much needed predictability and help accelerate decision-making.
To prepare for the future, industry-leading insurance provider Unum chose Anaplan to help consolidate its tools and deploy expense budgeting and reporting, investment portfolio planning, and predictive analysis. The platform afforded Unum streamlined operations and provided a 25% faster annual planning cycle, allowing the company to stay ahead of the competition and focus on future planning.
Stay ahead of the competition
A connected planning solution is essential for insurers to meet the challenges of the ever-evolving business landscape and drive strategic decision-making.
By driving seamless collaboration, delivering process automation, and integrating critical data, Anaplan empowers insurers to leverage real-time data to meet evolving regulatory requirements and beyond. Anaplan’s future-forward technology lends valuable insights where legacy tools fall short, allowing insurers to confidently navigate the future of financial planning.
To learn more about how connected planning can benefit your insurance company, visit our insurance page.