EY Global Insurance CFO Survey

2 | Global Insurance CFO Survey
Contents
5 Executive summary
7 Priorities and challenges
13 Delivering value in 2020
17 Positioning for success
23 Conclusion
25 Methodology
For additional information about this survey,
go to ey.com/insurance/CFO2015.

3Global Insurance CFO Survey |
Even as economies recover, the insurance sector continues to face many
competitive pressures and regulatory challenges. Yet a new drive for growth
is emerging. This survey captures the priorities and challenges for finance
and actuarial teams as they seek to support business growth strategies while
addressing ongoing regulatory and cost pressures.
Introduction

Delivering more value to the business through
performance measurement and improved decision
support is the top priority for the finance function
through 2020. Among senior finance professionals
participating in the 2014 EY Global Insurance CFO
Survey, 71% indicated that “being a better business
partner” ranked among their top three priorities,
with 35% placing this as number one.
As insurance companies around the world continue
to invest in data management and analytics
capabilities, the role of finance and actuarial
functions has become even more critical. The
processes and systems supporting these functions
are key to developing deep insights into business
performance, as well as customer needs, preferences
and behavior. In response, finance leaders have been
increasing their efforts to improve the capabilities
of their organizations to meet the new demands.
In the survey, 89% of respondents stated that they
have either begun a change program or are in the
planning stage.
However, the drive to better insights is not without
challenges. Among the issues is the impact of
continuing regulatory compliance demands.
According to 35% of those surveyed, implementing
new regulatory and financial reporting requirements
was the highest priority for finance and actuarial
organizations; 56% ranked this among their top
three. As a result, the ability for these organizations
to strike a balance between delivering value to the
business and meeting daily operational demands will
continue to be a challenge.
Not surprisingly, the current data and technology
footprint will require significant change to meet
the challenges of the finance function of the
future. Across the finance operating model, survey
participants scored data as the least developed
capability on average, while technology recorded the
greatest gap between current and required future
state.
In order to address these challenges, insurers will need to focus on three key activities:
• Modify the current reporting process by developing an efficient reporting solution architecture.
• Enhance the added value to the business through the deployment of more analytical skill sets and
resources and driving commercial awareness through timely and relevant management information,
linked to strategic objectives and performance indicators.
• Improve finance and actuarial operational performance by working “smarter, not harder,” with the right
skills and processes, in the right locations. This necessitates optimized use of systems and automation to
improve effectiveness and deliver more efficiency.
David Foster
Global & EMEIA Insurance Finance Change Leader
Executive summary

Priorities and challenges
71%
Survey participants rank “being a better business partner”
among their top three priorities for the next six years
43%
Senior finance professionals cite growth as the
number one business driver
44%
Finance teams that have launched improvement projects;
41% are in the planning stage
19%
Finance leaders who say their finance and actuarial functions
are completely integrated in the areas of planning, budgeting
and forecasting
59%
Percent of total finance and actuarial costs expended on
transaction processing and reporting
Although insurance companies face many regulatory and competitive pressures, improving
economies are stimulating new growth strategies. Finance and actuarial teams are adjusting
their own priorities in order to best support business growth, while also remaining focused on
satisfying regulatory and financial reporting requirements. However, they are confronted by a
range of challenges in seeking to deliver against their own and broader business objectives.

Figure 1: Percent of respondents ranking their driver among their top three
Primary business drivers
Please rank in order the following business drivers facing your organization
through 2020
Acheiving growth, expanding into markets and/or expanding
through MA activity
Relieving pressure on costs and margin/improving profit
Responding to regulatory change
Improving capital and liquidity position
Addressing competition from globalization
and new market entrants
Establishing risk migration and management
Increasing simplification through organizational restructuring
Preparing for leadership change and succession
Other
43%
17%
20%
17% 66%
20%
11% 31%
26% 54%
51%11%
17%
9% 11%
20%
14% 17%
3%
18%9% 9%
6%
11% 31%
29%
11%
6%
3%
3%
3%
3%
Order of priority:
First
Second
Third
Source: EY Research, 2014
In looking ahead to 2020, achieving growth is one of the
primary drivers and priorities for insurers, with improving
margins on current business and responding to new
regulation also both high on the list.
Of those insurers participating in the survey, 66%
indicated growth was among the top three business
drivers facing their companies, with less than half
(43%) ranking it their number one driver and priority
in the coming years. While this may signal a growing
confidence in the recovery of the global economy, cost
control and responding to new regulation also remains
among the top three business priorities. This indicates
that insurers are still feeling the impact of what continues
to be a very challenging economic environment .
As insurers seek to address these increasingly complex
and sometimes competing set of demands and
opportunities, finance and actuarial leaders recognize
their increasingly important role in helping the enterprise
work through these challenges and achieve its strategic
objectives and ambitions .

Figure 2: Percent of respondents ranking the driver among their top three
Finance and actuarial priorities for 2020
Please rank in order the following finance and actuarial priorities facing your
organization through 2020
Being a better business partner
(understanding the business, improved decision support)
Implementing new regulatory and financial reporting
requirements (includes accounting pronouncements)
Improving quality of reporting (internal and external)
Setting up finance to support growth (flexibility and scalability)
Aligning finance, risk, and actuarial information
Delivering finance services consistently
Reducing total/relative cost to operate finance
Other
15%
15%
32%
12%
15%
9%
3%
21%
6%
12%
21%
18%
15%
9%
35%
35%
6%
12%
3%
3%
3%
3%
71%
56%
50%
45%
36%
27%
15%
Order of priority:
First
Second
Third
3%
In order to best support and help prepare their
organizations to deal with these ongoing business
challenges, finance and actuarial leaders have identified
several key priorities including:
• Positioning finance to support the growth objectives
of the broader enterprise
• Implementing new regulatory and financial reporting
requirements
• Improving the quality of both internal and external
reporting
Among chief finance, actuarial and accounting executives
surveyed, being a better business partner to support
the growth agenda and provide better decision support
ranked the highest priority, with 71% ranking this
among their top three. Over a third listed this as their
number 1 priority through to 2020 (see figure 2).
Furthermore, recent conversations with finance and
actuarial executives confirm a renewed interest and use
of terms such as “value-adding activities” and “business
partnering.”
While these concepts are not new, cost control, new
regulation and general economic challenges have
typically demanded more urgent attention in recent
years. Indeed, these challenges still remain high on
the priority list with 56% of participants ranking the
implementation of new regulatory reporting in their
top three priorities. However, perhaps surprisingly, the
business focus on costs and margins (as shown in figure
1) has not translated into reducing the cost of finance as
being a high priority for the CFO. Only 15% of participants
ranked this among their top priorities.

As increasing demands are placed on finance, managing the costs will be challenging
Which of the following processes within your finance and actuarial
organizations are performed locally, or are shared services on-shore,
shared services off-shore or outsourced today? What is expected in 2020?
Transaction processing Local On-shore Off-shore Outsourced
Accounts payable and expense reimbursement
Actuarial reserving and valuation
Cost management
Fixed asset accounting
General accounting
Payroll
Revenue accounting
Taxes
Treasury
Reporting
Internal and external reporting communications
Communications
Decision Support
Planning, budgeting and forecasting
Performance analysis and
decision support
Capital management
Controls
Policy, procedures and controls
Internal audit
Finance Function Management
Finance HR
Finance IT
Figure 3: Bucking the trend
Utilization of on-shore shared services is expected to be highly leveraged across transaction
processing functions. Outsourcing will be selectively targeted toward payroll and internal audit.
Shared Services
Denotes a change of 10
percentage points or
more in either direction

Reducing the cost of finance did not rank as a
particularly high priority for most participants.
However, with insurers still under pressure to
reduce costs, finance will still need to play a role
in containing and carefully managing costs in the
future. Indeed, phrases such as “right sizing” and
becoming “more scalable” were often referenced
by survey participants .
Yet, with more internal and external demands
being placed on finance, even maintaining the
current cost base (let alone trying to reduce
finance costs) will be a major challenge for most
organizations. Simply applying more resources
and costs to meet these new demands will not be
sustainable. Finance and actuarial functions will
therefore need to generate more capacity and
funding that can be re-deployed to meet these
new demands through greater efficiency and lower
processing costs.
By 2020, finance processes will need to be
simplified and systems optimized to eliminate
manually intensive processing activities. Only key
business facing finance resources will be located
in higher cost locations, with remaining resources
“right sourced” in middle and lower-cost centers.
This is not necessarily a new ambition as many
organizations have already invested heavily in
the use of shared services and lower cost off-
shoring centers to drive standardization and lower
processing costs. But, most participants indicated
that they still wanted to do more.
While transaction processing has long been a
candidate for centralizing and moving to lower
cost centers, most participants still see more
opportunity. In addition, they also expect to have
more of their reporting and budgeting processes
managed through lower cost -shared service
centers by 2020. It is significant that the majority
of participants expect to achieve this, not through
use of more off-shore centers or outsource
providers, but through greater use of “on shore”
shared service centers.

Figure 4: Percent of respondents ranking the challenge among their top three
Challenges facing financial and actuarial organizations
Please rank in order the main challenges finance and actuarial organizations
will need to address to become better business partners and fully participate
in the execution of the business strategy.
Data: quality/granularity not synchronized with needs
Technology: infrastructure (not fit for purpose)
People: lack of resources/quality (skills) of resources
Process: inconsistent/not unified across the firm
Performance management expected role of finance
(not viewed as a business partner)
Strategy: lack of articulated finance vision
Organization: decentralized organization/globally
unified delivery model
Cost to execute finance responsibilities
Governance: finance not aligned on key enterprise
governance models (e.g., data standards)
Other
18%
18%
15%
18%
6%
6%
6%
9%
27%
18%
27%
12%
3%
3%
9%
21%
27%
12%
9%
12%
9%
6%
66%
63%
54%
39%
21%
12%
12%
9% Order of priority:
 First
 Second
 Third
15%
0%
Data and technology present
the biggest challenges to
business partnering
Weakness in the quality and granularity of data is a
frequent theme when talking to finance and actuarial
executives in the insurance sector; technology issues
are close behind, as indicated in figure 4. In our survey,
participants identify data and technology as the two main
challenges they face when seeking to be better business
partners and fully participating in executing the business
strategy.
For many insurers, the challenges are indicative of legacy
multiple-source systems resulting from a history of
growth through acquisitions and a lack of investment in
finance systems over the last 10 years or more.
Finance leaders also identify a significant people
challenge in relation to accessing the resources and
skills they need. This may reflect the renewed focus on
growth and business partnering, which requires very
different skills from, for example, financial reporting
production. As well as strong analytical skills, effective
business partners must understand the business and the
relative return on capital across different business lines.
The people focus revealed in this survey may also reflect a
growing interest in the wider organization being seen as a
good place to work – perhaps partly in response to a likely
heightened war for talent.
The process challenge facing finance and actuarial teams
is also identified by many participants. Its ranking behind
data, technology and people may reflect a recognition
that while process re-engineering is important and may
well have been a key lever for incremental change in
recent years, true transformation in finance now requires
a significant upshift in those other elements. Processes
may, however, be more of an issue for European
respondents, who typically need to improve processes
in order to achieve faster reporting for Solvency II
compliance.

Decision support
is the least developed
finance capability,
requiring the biggest
improvement to meet
2020 expectations.

Decision support functions will undergo the greatest transition from
current to future state
There is no reason to expect today’s competitive,
regulated and challenging insurance market to
become any easier by 2020. If finance and actuarial
organizations are to provide the strategic decision
support that their businesses require, operating models
and processes need improvement. Greater centralization
of finance processes may be needed to achieve
improved efficiencies and free up human resources to
focus more on value-adding activities that enable better
decision-making and delivery of strategic priorities.
As insurance finance and actuarial departments align
to become better partners to the business, the role of
decision support will become a critical component of
the finance operating model. In the survey, participants
were asked to rank their company’s level of maturity
across five finance process groups – both today and
where they expect to be in 2020 (see figure 5).
Decision support received the lowest current score and
the highest expected maturity level in 2020, and thus
revealing the biggest capability gap. Across individual
organizations, the level of decision support ranged
from producing management information in the form
of reports to dedicated, highly skilled resources working
directly with business unit leaders to provide critical
insights during the decision making process.
In order to meet future needs, many finance and
actuarial organizations will need to invest in upgrading
their planning, budgeting and forecasting, business
insight and decision support capabilities to match those
of best practice companies today.
Notably, transaction processing was also seen to be one
of the weaker finance capabilities, with respondents
identifying a need to get to an “advanced” maturity
level. This may reflect a drive to reduce costs and
the need for better-quality transaction data as the
foundation for faster and better quality reporting.
This implies that many organizations still see the
opportunity for further opportunities to improve
efficiency and effectiveness, and that “getting the
basics right” is a prerequisite foundation required to
enable better reporting and business insight.
Finance and actuarial
process groups
Basic Developing Established Advanced Leading
Average maturity level
Transaction processing
Reporting
Decision support
Controls
Finance function management
2014 2020
Figure 5: Comparison of maturity levels for finance and actuarial groups
For each finance process group, please rate the current and expected
(2020) levels of maturity within your finance and actuarial organizations.
Delivering value in 2020

Most finance leaders
see a need to improve
their finance and
actuarial capabilities,
but do not need to be
“leading” to achieve
their goals.

Finance and actuarial
capabilities
Basic Developing Established Advanced Leading
Average maturity level
2014 2020
Operation strategy
Policy
Organization
Governance
Processes
Data
People
Technology
Performance management
Figure 6: Comparison of maturity levels for finance and actuarial capabilities
For each capability below, please rate the current level of maturity within your
finance and actuarial organizations and the level of maturity required to meet
the objectives of your finance and actuarial organizations through 2020.
Across a range of organizational capabilities, data was
identified as having the largest gap between current
maturity levels and the level of maturity required
to meet 2020 finance and actuarial objectives.
Respondents’ current ratings range from “developing”
to “advanced,” indicating substantial variety within
organizations. Scope for improvement exists for
technology as well, where some respondents listed
their current maturity level as “basic,” whereas others
identified it as advanced. This highlights the difference
between those who have already invested in new
platforms and those who have yet to do so.
It is notable, however, that most finance leaders do not
see a need to achieve the highest – “leading” – maturity
level; “advanced” status may well be sufficient and
achievable at lower cost.
Interestingly, finance leaders identified people as
their most established capability in 2014, but also
indicated they still expect people capabilities to improve
significantly through to 2020. Anecdotally, finance
leaders are proud of the quality of the people they have
on their teams and recognize that many are capable of
taking on more challenging roles and delivering greater
value to the business.
Data, technology and people need most improvement to meet 2020 needs

There is no one right
answer as to the level
of investment and
areas of focus required
to prepare the finance
function to deliver
value in 2020.

Positioning for success
Figure 7: Percent of total finance and actuarial FTEs by functional area
Average of survey participants
In looking at the finance function within companies
across the industry, it becomes apparent that there are
many differences in the level of maturity among key
functions and core capabilities. This is invariably the
result of differences in business mix, geographic reach
and strategic direction undertaken by each company.
As a result, there is no one right answer as to the level
of investment and areas of focus required to prepare
the finance function to deliver value in 2020. However,
there are three key actions that all companies,
regardless of current capability and aspiration, should
focus on to be best positioned to be a better business
partner in the future.
• Fix the reporting processes
• Enhance the “value-add” to the business
• Drive operational effectiveness and efficiency
Robust management of new
reporting processes are required to
deliver speed and quality
Current reporting processes among global insurers are
typically inflexible and time-consuming, with significant
manual intervention. Next to transaction processing,
the reporting function accounts for the largest share
of finance and actuarial headcount, reflecting the level
of effort needed to produce the required number of
internal and external reports.
The underlying transaction and reporting processes
remain the biggest driver of cost and resource
for finance and actuarial teams. And perhaps not
surprisingly, the goal for most finance and actuarial
leaders is to reduce the proportionate cost and effort
spent on these processes in favor of more resources
spent on decision support. However, this ambition is
not new and has been a typical CFO objective for many
years. So while many organizations are planning for, or
already have improvement programs underway, careful
consideration needs to be given to agreeing the target
operating model, delivery plan and responsibilities with
associated success measures, to ensure the shift in cost
and resource is actually delivered.
39% 35%
25%
24%
20%
23%
8% 9%
8% 9%
2014 2020
Transaction
processing
Reporting
Decision
support
Controls
Management
All lines

Some of the key drivers for the current complexity (and cost) of underlying
transaction and reporting processes for many have been historic
mergers and acquisitions, where systems and processes were never
fully integrated, and the increasing volume and scope of new reporting
requirements. The traditional response to these drivers has often been
to “bolt on” tactical fixes or work-arounds, which in turn incur additional
resources and costs to maintain, and often cause difficulties in producing
meaningful analysis and decision support. This reactive approach has
contributed to the high finance cost basis and difficulties producing
analysis for decision support. Additionally, organizational issues have
hampered the efficient production of reports, with the connectivity across
finance and actuarial functions and processes being far from optimal.
By 2020, reporting processes will need to be faster, more robust and
capable of providing multiple reporting views. This will require reporting
processes and systems be “fit for purpose” to meet various new
regulatory, financial and business requirements. Furthermore, while
ensuring that the required content can actually be produced for these
new reports and metrics, the requirements also require faster, and more
flexible reporting processes.
Fixing the reporting processes will be dependent on radical process
redesign and a mind-set shift for those involved. Data consistency,
supported by technology that can automate processing and readily
provide multiple reporting views, will be keys to improving the
reporting process.
Finance needs to support and challenge
the business in making the best possible
commercial decisions
Challenging market conditions facing global insurers require that
management have access to more relevant and timely performance
information. These include insights into product and channel profitability
and a robust assessment or challenge of strategic decisions from a
finance, risk and capital perspective.
By 2020, finance will own and manage an enterprise-wide performance
management process, integrating finance, risk and actuarial skills to
deliver insight to the business through experienced finance business
partners. Timely and relevant management information and real
commercial awareness will be the keys to success.
The transformation will require a cultural change, as well as a number
of specific people and organizational initiatives, mainly linked to the
development of the business partner role. The organization will need a
deep understanding of the key drivers of shareholder value embedded
in the enterprise performance management processes. This will require
finance to develop new skill sets to analyze the end-to-end measures and
to implement new technology and data analytics capabilities to effectively
understand and help manage the performance levers.
Further integration of finance and actuarial functions will be crucial, as
each will bring complementary skills, including accounting, reporting and
control (finance), and analytics and business understanding (actuarial).
Currently, 19% of finance leaders say their finance and actuarial functions
are completely aligned in the areas of planning, budgeting and forecasting
while another 19% are nearly there. A further 43% anticipate full
integration by 2020.
How aligned are finance and actuarial in
the planning, budgeting and forecasting
areas?
19% 19%
19%
43%
■ Completely integrated
■ Full integration nearly complete
■ Partial integration with plans for full by 2020
■ Partial integration with no plans for full
Figure 8: Integration of finance and actuarial functions

As indicated by our
survey participants,
85% have already
launched a finance
change program or are
in the planning stages
of a change initiative(s)
in order to meet future
business demands.

Figure 9: Change program activity, percent of respondents
Conclusion
The global insurance industry has faced numerous challenges in recent years. While most industries have
struggled in the aftermath of the global financial crisis, insurers have also had to contend with increasing
regulation, including changing financial accounting and reporting requirements. Meanwhile, the market has
remained “soft” and highly competitive – with continued pressure on rates and pricing.
Yet encouragingly, the industry is shifting its focus toward growth. Increasingly, insurers are reviewing their
product mixes and seeking to grow written premiums, whether by extending business lines, increasing their
share of mature markets or developing new opportunities in emerging markets.
Finance and actuarial executives recognize they have a key role in supporting these business objectives, but
in turn the outlook presents a particular set of challenges in the coming years. They share the ambition and
see the opportunity to deliver real value to the organization in the form of deeper insights into performance,
risk management and strategic planning, helping lead their organizations to succeed. However, to do so in an
increasingly complex, unforgiving and more stringently regulated environment will undoubtedly require some
tough priority decisions along the way (note the plans for change program activity in figure 9).
Clearly, finance and actuarial functions cannot afford to stand still and there is a need for them to retool in the
coming years. As indicated by our survey participants, 85% have already launched a finance change program or
are in the planning stages of a change initiative(s) in order to meet future business demands.
Where are you in your finance and actuarial planning to address the top
five priorities?
6%
9%
44%
41%
■ Plans in place and change program
underway to deliver on priorities
■ Priorities considered and planning
underway to address
■ Have considered priorities but no planning
in place yet
■ Have not considered these priorities
(not selected)

Background and methodology
This survey sought the opinions of senior finance,
accounting and actuarial executives from 35 global
insurers operating across 10 leading insurance markets.
Life, non-life and multi-line insurance companies are all
represented.
Conducted in the first half of 2014, the survey focused
on the key strategic and business drivers for insurers
and their likely impact on finance and actuarial functions
through to 2020. It considered finance and actuarial
priorities and the challenges ahead.
The second section of the survey focused on the finance
and actuarial operating model, including current and
aspirational levels of maturity across nine components of
the model and across five finance process groups.
Finally, the survey gathered data on the structure of
finance and actuarial functions, including the extent of
shared services and outsourcing, numbers of full-time
equivalent employees, finance and actuarial costs, and
the prevalence of transformation programs.
Premium volume across all participants exceeded
US$330b, with per carrier totals ranging from just under
US$2b to nearly US$50b. Carriers included 10 of the top
25 global insurers as ranked by A.M. Best Company.
Methodology
Percent of respondents by geographic region
Percent of respondents by primary line of business
43%
27%
35%
38%
22%
24%
8%
3%
■ North America
Life Non-Life Multi-Line Specialty Reinsurance
EMEIA Asia-Pacific

Notes

EY | Assurance | Tax | Transactions | Advisory
About EY
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and confidence in the capital markets and in economies the world over.
We develop outstanding leaders who team to deliver on our promises
to all of our stakeholders. In so doing, we play a critical role in building
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the member firms of Ernst Young Global Limited, each of which is
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information about our organization, please visit ey.com.
© 2015 EYGM Limited
All Rights Reserved.
EYG No. EG0221
1403-1344536 NY
ED None
This material has been prepared for general informational
purposes only and is not intended to be relied upon as
accounting, tax or other professional advice. Please refer to
your advisors for specific advice.
ey.com
Contacts
Global
David Foster
+44 20 7951 5687
dfoster@uk.ey.com
ASEAN
Esther See
+65 6309 6182
esther.see@sg.ey.com
Greater China
Phil Gough
+852 28469778
phil.gough@hk.ey.com
EMEIA
Ian J. Robinson
+44 20 7951 6106
irobinson@uk.ey.com
Oceania
Andy Robertson
+61 2 9248 5436
andy.robertson@au.ey.com
US
Sandy Sposato
+1 212-773 6231
sandy.sposato@ey.com

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