The full plate of Z Insurance CFO
The latest acquisition by International ABC Bank has brought Jessica even more work. As Z Insurance CFO, she was overseeing Businesses of General Insurance, Life Insurance and Re-Insurance across 5 different countries. In her daily life, she was constantly dealing with the following operational goals:
· To keep up with new regulations and become compliant with IFRS17 standards by end of this year
· To target financial close bottlenecks in monthly and annual financial close
· To provide businesses with better insights, which required improvements in financial models – they just could not become stale.
In addition, Jessica was asked by the CEO Group to prepare for an ambitious expansion into 12 additional countries, to be completed in the next 5 years.
This obviously has created additional challenges as the existing programs were already taking 90% of her team’s time. Having to work with one of major regulatory change adaptation and having to deal with time, drainage by manual processes every month and the need to use adaptive models, Jessica was faced with the following question:
How should I respond to this demand?
Strategic vs. tactical approach
Making an additional investment in Finance Department’s operational capabilities was more than certain. But it wasn’t really obvious what’s the most effective method of allocating Jessica’s investment budget.
“Shall I go more tactical or more strategic with my new investments?” Jessica was thinking. On the one hand, she felt constant pressure to deliver immediate results. However, making a quick fix would not necessarily address building the strategic advantage of her department.
“If we go more tactical, we quickly hire more people and this quickly solves our problem for today.
But what about tomorrow? If we think more strategic, we might choose to apply more automation, which brings us better ROI and creates long–term advantage which, in turn, we will use to outpace our competitors”.
One of the considered solutions was to look for expanding Bank’s tech stack and use the Aptitude Software Insurance Solutions products. At first sight, the solution offered important benefit to actuaries and organizations finance automation in complex environments:
· Reducing manual work (in data preparation and manipulation)
· Offering business process automation
· Democratizing finance data
That could give back time to Jessica’s finance team, allowing them to steer the business again instead of driving internal processes only.
Challenges of CFO’s team
For example, the team was trying its best to increase their business agility. However, it was not easy as they were constantly questioned by the business and needed to answer big questions quickly and with confidence. The typical requests looked like this:
I was wondering if you can provide us with a quick analysis of which factors are most commonly making swing into a loss position within my portfolio of contracts? I’d aim to adjust our pricing accordingly, so would you be able to give us some insights on this by tomorrow?”
Our General Insurance Team would like to understand how the service margin for a single line of business varies from their region to region? Knowing this will ultimately help them in assessing where they can place their marketing efforts more effectively.”
Moreover, Jessica was under constant need to optimize her expansion plans using a forecast of balance and include external factor impact e.g. IFRS17 standard introduction. That was one of the situations where she acknowledged the benefits of using Aptitude Simulation as a part of Aptitude Insurance solutions.
How increased expectations can be met
A sample case was work performed by Ahmed – the Financial Controller and member of Jessica’s team. He was supporting her by running simulations for their target extension regions.
Thanks to Simulation capabilities, he was able to respond to incoming requests quickly and accurately. This would typically look as follows:
· When Jessica asked him for a new report, Ahmed had already had one baseline forecast for a target market – the country where they want to expand to. And then he’d start making modifications, according to Jessica’s request. This time his additional assumption to consider was the current geopolitical situation in the country that might have had an impact on unpredictability.
By using Aptitude Calculate, Ahmed could start performing a comparative scenario with altered assumptions using this sequence:
· Firstly, he identified the cash flows he would like to use for his simulations.
· Luckily, he didn’t need to create data sets from scratch. He could use historical cash flows calculations from Insurance Calculations or scale them up or load data set from a file he had prepared earlier.
· Then, he ran an alternative forecast using assumptions set up.
With simulation cash flows completed, Ahmed could start preparing a new forecast.
· In case he needed to change some of the assumption sets, he could do it using the Scenarios Screen: vary accounting setup, balance configuration. Ahmed could review them and either drill down into the configuration and customize it or, simply, leave it if this was good to process further.
· Then, Ahmed could run a scenario with just one click and move it into the scenario results dashboard.
· By manipulating dashboard customized graphs, he could present a base and comparative report – just to clearly show the difference between the baseline scenario and alternative one.
The simulation was ready to release and present.
Are you interested to learn more about equipping your finance team with Aptitude Products? Or would you like to know more about FIIT Consulting finance transformation experiences? Feel free to reach out to us via: https://fiit-consulting.com/contact/