Insurance companies are facing many challenges today, including increased price sensitivity from customers and greater pressure from competitors. They have historically struggled to get an accurate view of which products, customers, regions, and segments are really profitable. In the new world of digital collaborative business models, this will become crucial.
While insurers are continually looking for ways to improve profitability and cost management, this is often difficult because these companies do not have the right tools to manage their risk and finance processes.
A recent IDC Global survey found that financial services firms have a strong need for solutions that consolidate these processes. “Leading insurers are increasingly looking to consolidate their operations onto a single, integrated IT platform that provides both efficiency and business intelligence,” says Li-May Chew, research director, IDC Financial Insights.
An evident need, but few onboard today
Despite this apparent need, the survey results revealed that these companies are still at varied levels of integration when it comes to connecting their risk and finance offices through technology. “Respondents to our latest survey with SAP indicate that C-suite leaders are most concerned with expanded regulatory environments and economic uncertainty,” says Chew. However, only half of the companies are achieving some level of integration.
“By adopting new technology solutions like those from SAP, companies can work smarter and better plan and predict future changes in the market,” Chew adds. And a key opportunity in this area is the ability to process and analyze vast amounts of corporate data that can help these firms better accommodate allocations and thereby increase profitability and cost management.
Better cost and revenue allocation leads to greater profits
To take advantage of this opportunity, insurance companies are turning to the SAP Cost and Revenue Allocation for Financial Products application powered by the SAP HANA platform. Now, with this software from SAP, insurance companies can maintain and execute complex allocation models to create the data foundation for flexible, real-time, high-speed profitability analysis of insurance products.
With this application, companies can improve business processes and overcome technical limitations in the allocation of costs and revenue in real-time data analysis at the most granular level.
The application enables companies to process higher volumes of data, gain a more detailed analysis of data, and accommodate a wide variety of allocation rules so they can manage profitability and performance measurement better.
Having the ability to process core data points quickly across the entire organization gives insurers the insight they need to stay ahead of their competitors and increase their return on investment.
The SAP application leverages the technical capabilities of SAP HANA and unleashes the potential of in-memory technology as the application logic moves to the SAP HANA database layer for accessing source data on-the-fly. It is also designed to work seamlessly with the SAP S/4HANA Finance solution and the SAP Insurance Analyzer analytic applications.
To learn more about the full power of this solution, watch this short solution overview video.
Also, join SAP on March 10-11 for an informative 2 day workshop in Waldorf (register here).