Aptitude Software recently exhibited at IASA 2016 in San Antonio, Texas. Delegates from many of the leading insurers and solution providers met over the course of three days to share, network and collaborate.
Aptitude Software recently exhibited at IASA 2016 in San Antonio, Texas. Delegates from many of the leading insurers and solution providers met over the course of three days to share, network and collaborate. Two key themes emerged as a result: a changing regulatory environment and customer centricity at the core.
A changing regulatory environment
The insurance industry continues to feel the pressure of the complexities of regulatory change. As a result, insurers need to address regulatory requirements, provide transparency and insight. While at IASA 2016, Aptitude Software conducted a short industry survey and, not surprisingly, 46.9% of respondents say that a changing regulatory environment is the main challenge their firm is currently facing.
With the forthcoming new IFRS 4 insurance accounting standard and FASB’s insurance-targeted improvements to the accounting for Long Duration Contracts revised exposure draft on the horizon, both standards are expected to have a significant impact on IT systems and financial processes and controls. Additionally, IFRS 9 is expected to affect insurance companies as it relates to investments subject to credit impairment accounting. The US has also issued its financial instruments standard on accounting for expected credit losses which will require the recognition of an allowance for credit losses for held-to-maturity debt securities, loans and other financial instruments measured at amortized cost.
The ripple effect of the 2008 crisis continues as liquidity and capital reform evolves for insurance companies. The evolving US capital requirements reform appears to require a phased approach and will be based on similar criteria as Solvency II. While uncertain in nature, and, regardless of the timing, we believe that insurance companies must have a solid grasp on their capital position and capital forecasting in order to comply with these forthcoming requirements.
Customer Centricity
A shift from product to customer centricity has insurers realizing they require a 360° view of the customer and their needs throughout the life cycle of the relationship. Heightened competition and changing customer preferences introduces the challenge of developing simple and more transparent products, that cost less. But matching products to customer needs can prove difficult. With staggering amounts of data available, insurers can manage risk by designing policies specific to that clients’ needs. Predictive analytics also come into play to quickly assess a client during the underwriting stage of the policy.
Embracing regulation, data and technology will only help the insurer, but must be a company-wide initiative. Agility and responsiveness to the regulators and customers amid these shifts is paramount to long term success.
Aptitude Software offers a range of solutions to provide the financial data foundation and tools needed to drive their business forward with complete financial control, insight and transparency.
