Enterprise Risk Management Technology Guide :: Aptitude Software: Finance transformation for insurers

Aptitude Software: Finance transformation for insurers

What insurance technology trends can we expect in the future?

Christophe KasolowskyThe most significant trend in insurance finance technology right now is the push for a radical rethink of the core finance technology and data architecture, and an urgency to invest to ensure the finance function is sustainable for the next decade. Insurers are stepping back and evaluating how the decisions they are forced to make today are going to enable the transformation of their finance function.

Taking advantage of compliance investments is key to avoid the path taken by the banking industry who focused purely on compliance without extracting value from the investments in their finance and risk functions. Now many banks are left with a technical debt – they might be compliant but it’s onerous to run what they’ve put in place and they are not set up for the future. Insurers are looking to take a more strategic approach.

An equally important focus is the need to transform the FP&A [financial planning and analysis] function to where finance can model scenarios, provide insights at speed, and guide their boards on investments and operational actions. The critical unlock here are cloud platforms with their enormous computing power, add-on solutions (e.g., data quality and machine learning) and very low cost of ownership.

As a result, you are going to increasingly see a ‘thinning’ of the general ledger, allowing it to act as a statutory/regulatory reporting and control tool while cloud-based subledgers and accounting hubs take on the role of the ‘fat’ instance of finance data, providing real-time access to accurate, easily accessible data to the downstream business at a lower cost.

Finally, I think insurers are ahead of the curve on blockchain solutions. There are some interesting use cases around transparency and automation that are reflective of the innovative, forward-thinking spirit we’re seeing in the industry.

Do you see most insurers using IFRS 17 implementation for finance transformation? 

Yes. If you pick any IFRS 17 programme at the moment, 75% of the budget is allocated to transformative aspects of the project. The recognition of the need to invest is there since we are talking about decades of consolidation and growth without any investment in back-end systems.

Of course, some insurers may prioritise certain aspects of the project to get compliant within the deadline, but most insurers are looking for long-term strategic benefits.

What is the number one issue for insurance companies around IFRS 17?

Without a doubt,  it’s data.

It’s not just a technology problem, it’s a business model problem. How do you create a data set when you’ve never collected some of the data in the first place? Is the data consistent, accurate and granular enough? Companies need to solve those problems very quickly to meet IFRS 17 parallel reporting requirements.

Market-leading insurers are not going to try and change their legacy architecture to meet these challenges. They are going to use best-of-breed machine learning and AI cloud solutions to solve the issues.

Why should insurers choose Aptitude Software’s solutions?

Our finance and technology experts have thought about what insurers will need both for immediate compliance and over the next decade. That expertise is built into our insurance rules engine through accelerators which include posting patterns and IFRS 17 disclosure reporting. Our integrated, market-leading subledger will support the strategic capabilities insurers are demanding.

Our solutions also have an excellent track record of integrating upstream and downstream, allowing the organisation to adopt a best-of-breed approach.

Is Aptitude Software planning any new product launches or updates? 

At our core, we remain fully committed to the subledger as a foundational piece and key enabler for the finance function. We also remain committed to enhancing or providing solutions to address future regulatory change like the expected UK/US corporate reform or future guidance on reporting around ESG, for example.

That said, our roadmap looks to radically progress the way our solutions can make use of cloud computing and continues to focus on increasing the ‘plug and play’ nature of our products and developing clear views on how data needs to move with fluidity through our solutions.