Shift in Transformation Efforts: Focus on Financial Solutions

Shift in Transformation Efforts: Focus on Financial SolutionsAite-Novarica Group’s Top 10 Trends in Property & Casualty, 2023: Turning Disruption Into Opportunities report identifies “transformation moves beyond core systems” as one of the top trends in 2023. As many core system transformation initiatives are nearing completion, carriers are shifting their transformation efforts to optimize other business capabilities, such as general ledger (GL) and financial systems. Operational efficiencies, ease of doing business, and faster time to market are all key reasons why carriers are showing an increased interest in financial transformation projects.

Interest in financial transformation is on the rise for many carriers, especially those with complex legal entity structures or those that have recently completed an acquisition. Through our discussions with insurers as well as some informal surveys, we’ve gleaned key insights into best practices for financial transformation.

1. Consolidate as many business segments as possible onto common financial solutions.

Companies are striving for a common GL system for all their businesses, as well as a common billing platform for all entities. GLs are most commonly consolidated to gain enterprise-wide insight into financials for businesses. Consolidated premium billing is also an objective, although it is more difficult to achieve. Billing can be closely integrated with policy administration systems; some carriers find migrating to one solution for different businesses to be ideal but challenging. 

GL and premium billing solutions can handle a range of products, currencies, and geographies successfully. Carriers often cite implementation of SaaS-based GL solutions such as Workday and Guidewire’s BillingCenter for premium billing.

2. Selecting a strong systems integrator (SI) is as important as selecting the right technology solution.

Choosing the right SI is a crucial part of a successful financial transformation journey. Although the solution provider will be a key resource, SIs play a key role on transformation at scale. SIs partner with carriers as well as with the solution provider to provide carriers with a 360-degree view of the initiative. SIs can help carriers modernize business practices and processes in addition to the technology.

Developing an engagement approach with key executives at the solution provider and the SI is also important. We find that executive relationships help to get over pricing hurdles or delivery obstacles. At the same time, carriers should keep escalation to matters that are real and core.

3. Change management must be a key component of the overall program.

Carriers recognize the importance of organizational change management, and it is the item that requires the most attention. Prioritizing change management is key—changes to roles and processes are far more difficult to implement than the technology. Training is another area that should garner attention and focus.  

Financial functions touch many processes inside a carrier as well as with external parties. Employees, agents, and customers need to be part of making the change successful to achieve business goals.

In 2023, Aite-Novarica Group expects a continued interest in financial transformation projects, as well as many other transformation efforts, as carriers look to gain operational efficiencies across the enterprise. For additional information on how insurers are transforming their systems, read Aite-Novarica Group’s report Top 10 Trends in Property & Casualty, 2023: Turning Disruption Into Opportunities, or reach out to me at [email protected].

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