Transforming Finance and Operations in Insurance

No individual, business, or country is unaffected by what looks to be the biggest crisis of our generation. Like most industries, the insurance sector has been highly impacted by market volatility. And in the background, the sector has also been adopting major regulatory changes while adapting its operating model to a fast-changing digital world.

This is no doubt a very challenging period for the insurance industry. The pandemic has increased life and disability issues, and small businesses are filing business insurance claims that could never have been foreseen by insurance carriers. Insurance operating models are under stress as teams work from home, financial advisors no longer meet customers face-to-face, and contact centers are experiencing high peaks in activity. On top of that, priorities such as IFRS 17 and digital transformation need strategic airtime from leaders.

Deloitte and Anaplan have been collaborating with global insurance experts in Asia-Pacific to understand how the pandemic has affected the insurance sector in that region, and how organizations are navigating their way through adapted planning processes to support business resiliency.

Introduction

Finance teams need to provide much more data-driven insight and help the business translate it into executable actions.

Businesses are looking for more support from the finance function, with instant and multiple scenario planning forecasts.

There’s an opportunity to look at how forecasts are prepared and expenses managed to see how business agility could be increased.

The need to develop and upskill finance community staff.

How has the pandemic impacted organizations’ operating models and finance transformation agendas?

Andreas Rosenthal

Chief Financial Officer Prudential Assurance Company Singapore

At Prudential we have been on an enterprise-wide transformation journey for a while, but the pandemic has really accelerated it. To serve our

customers even better during this time, we rolled out new digital services such as “PRU Remote Advice”

and “Pulse”, our Health and Wealth Ecosystem.

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Henri de la Serve

Chief Financial Officer, AXA Hong-Kong and Macao

The pandemic has offered an unexpected opportunity to accelerate our transformation

due to two primary reasons.

When the border closed in January 2020, some of our customers could not come to Hong Kong anymore.

In parallel, interest rates dropped significantly.

As a result, we have accelerated our transformation by concentrating on some key actions on the

finance side from both a P&L and balance sheet perspective, and ensuring we had the right actuarial

resources to support it. Human resources is a key element for us in our transformation.

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K V Dipu

President of Operations and Customer Experience, Bajaj Allianz General Insurance

We had two main constituencies to concentrate on: the customer and the employee. We needed to keep employees emotionally and digitally connected, so we embarked on a homegrown employee engagement

program called “Celebrating You”. We wanted to convert adversity into opportunity so we moved from employee engagement to family engagement which really maintained employee motivation. In fact, our

employee engagement scores during the pandemic have ended up being higher than they were previously.

For customers, we wanted to migrate them to our digital platforms. We launched a massive communications

campaign that told customers they could use alternative digital platforms like our native mobile app, our AI driven chatbot and WhatsApp. Even though the contact centers

are now back in action, 80% of our servicing happens through our digital assets and complaints have fallen

by 90%. It goes to show that customers are finding the end-to-end digital journey effective and enjoyable. “

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COVID-19 forced a shift from innovation and transformation back to the basics: people, assets, bandwidth, and cyber security.

There is a greater frequency of detailed reporting on all aspects of the business and a focus on scenario forecasting to understand the impact of macroeconomic factors, such as interest rates.

A greater importance on separating business-critical and non-essential initiatives, and channeling resources appropriately have emerged.

Business mindset has changed and agile working is vital: a 100% perfect solution is less important than being quick and responsive.

IFRS 17 affects the performance and forecasting areas of the business. It’s critical that organizations look at their planning tools and start locking down decisions in advance of the change coming into force on January 1, 2023.

How are priorities being reassessed in the new environment and has anything changed in the way planning and performance are managed?

The world has shifted from a physical way of working.

We realized our new state of normal brings a different set of customer needs and that we had to fulfil both customers’ stated needs and those unarticulated needs that didn’t exist prior to COVID-19, with agility and precision.

When the pandemic hit us in March 2020, customers needed to be able to trace people they had come into contact with, so we developed a feature on our mobile app.

To combat physical healthcare needs during lockdown, we created the opportunity for customers to have digital consultations with doctors if they felt unwell – a “Doctor on Chat” option, as well as the ability to carry out COVID tests in the comfort and security of their own home. These kinds of provisions are not the exclusive domain of an insurance company and our customers were grateful that we took the time to understand and meet their unstated needs.

Use case: new customer behaviors in the new environmentK V Dipu

President of Operations and Customer Experience, Bajaj Allianz General Insurance

How will modern planning technology help to navigate the current uncertainties and support business resiliency?

Agile planning tools that provide accurate, real-time information that feeds into the decision making process are critical.

Planning tools that are easy to use, learn, and maintain, with great functionality and the ability to seamlessly integrate with core legacy systems, will win the technology race.

Touchless UI and UX will remove customers’ fear of coming into contact with the virus.

We embarked on our connected planning journey about a year ago when we implemented the Anaplan platform.

Our goal was to address pain-points in the planning process across the organization and make it a more efficient outcome.

In twelve months, we have integrated our end-to-end expense budgeting, forecasting and allocation, sales and volume budgeting forecasting at the channel and product levels, and also our strategic workforce planning into the Anaplan platform. Feedback from staff is hugely positive: there’s no more manual intervention or use of Excel as it’s all seamlessly automated. We’ve realized over 80% time saving in those processes and made life easier for employees.

But we didn’t stop there. We undertook Anaplan’s Accelerate Diagnostic program where the team conducted both top-down executive leadership interviews on the effectiveness of our planning process, and a bottom-up survey with managers and staff involved in the planning process. The process offered insight into what could be enhanced and also the difference in the planning maturity of some business functions. Our new vision was born from this program, where we decided to integrate the operational technology and customer function to enable true enterprise-wide planning. Our business is already benefiting from having a single source of truth and instant scenario planning across the organization, which enables decisions to be made based on real-time data.

Use case: a new vision for enterprise-wide planningAndreas Rosenthal

Chief Financial Officer, Prudential Assurance Company Singapore

Large, complex general insurers are fully involved in IFRS 17 programs; smaller companies are slower to get going.

For general insurers in the early stages of starting IFRS 17, there are three main things to consider:

The sooner you start, the more choices you’ll have and the more value you’ll get from going into your systems and changing them to IFRS 17.

Get your auditors involved early on because you’ll be making policy decisions and building data around them.

Some regulators are changing what they do to adapt for IFRS 17; bear in mind any data requirements in your analysis.

How are general insurance companies facing the challenge of implementing IFRS 17?

Anne Driver

Partner, Audit & Assurance Global IFRS 17 General Insurance Leader,

Deloitte Australia

In a world beyond IFRS 17, I’m hoping that the insurance industry will be improved in three areas:

1. Portfolio management with superior data, analysis, and better metrics will drive an enhanced industry with fewer surprises.

2. Increased disclosures so that our investors, analysts, and user community understand how companies compare to each other and other industries.

3. Better systems that make use of the tools and technology that are available. “

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Contacts:Tony Trewhella Partner Consulting in Asia Pacific

If you want to know more about the challenges of finance and operations transformation in the insurance sector, check out our on-demand webinar.

Henri Wajsblat Head of Financial Services Solutions, Anaplan

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