N100 Benchmarking: Finance and Operations Capabilities Are Widely Deployed, but Can Still Mature

Insurers’ technological capabilities are strongest overall in finance and operations, but this strength conceals some variance. Analytics capabilities for finance and operations are less developed than digital and core, midsize insurers tend to trail their larger counterparts, and while many capabilities have wide deployment, most insurers don’t feel their capabilities are “mature” yet.

Most insurers think about digital and data capabilities in outward-facing functions, but carriers are also deploying technology-enabled capabilities to manage their finance and operations more effectively. This can include internal self-service and workflows, advanced reporting, and core systems that enable better responsiveness and higher internal service levels.

The Novarica 100 (N100) Framework includes 12 capabilities in each of eight functional areas: product development, marketing, distribution, underwriting, customer engagement, billing, claims, and finance/operations. These capabilities are divided evenly into four digital, four data, and four core functions. There are also four additional capabilities specific to the operations of IT to round out the even 100.

Digital capabilities in finance and operations include digital HR platforms, digital workflows, and internal skills directories.

Data and analytics finance and operations capabilities include advanced profit-and-loss analysis, what-if modeling capabilities, and enterprise customer value analytics.

Claims finance and operations capabilities include rapid books close and automated invoice routing, as well as Payments-as-a-Service and flexible allocation.

Digital capabilities for finance and operations are the area where insurers are most mature overall. But this is also an area where midsize insurers can lag: For example, while digital HR and digital approval workflows are common at many insurers, they are more mature at larger insurers.

Similarly, finance and operations core capabilities have fairly wide deployment, but most insurers don’t rate their technology as “mature” in this functional area—more than half of all insurers have capabilities for rapid books close, but less than a quarter self-rated these capabilities as “mature.”

Finance and operations data capabilities are less widely deployed than digital or core, though they still compare favorably to data capabilities in many other areas. Like core finance and operations capabilities, many insurers have “some” capabilities in most data areas, but few rate themselves as mature.

Insurers’ finance and operations capabilities show that there is a difference between technology being deployed and being mature. This is also common with data capabilities, where it can take time for technology to be fully understand and fully integrated into workflows.

The N100 framework is also available as a self-rating tool for insurers; if you’re a Novarica client or Research Council member interested in benchmarking your company, feel free to contact [email protected] to receive a copy.

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