data analysis with excel for insurance companies

#Data analysis with excel for insurance companies series#

Adopting a top-down pragmatic approach helps firms focus on what is most important and avoid a “boil the ocean” scenario in which considerable time and effort are spent trying to resolve all the granular issues without much visible business benefit.Ģ. Invariably, it will be ownership and implementation of this vision that is the most difficult part. Even when the requirements are well understood, the right solution is needed to deliver the business benefits in a cost-effective manner. Creating a common vision across the entire business is not difficult at the highest level, but it becomes more challenging when trying to define the exact requirements across numerous stakeholders. Vision for risk-based performance metricsĪlthough insurers have a good understanding of the type of historical information they need, the requirements tend to be siloed within functional areas (e.g., finance or risk). In reality, however, insurers must anticipate multiple challenges, both in terms of data and organization.ġ. On the face of things, creating these interactive dashboards seems relatively straightforward.

#Data analysis with excel for insurance companies series#

This in essence translates to a series of interactive executive dashboards with drill-down and “what-if” capabilities that display the requisite analytical information.įour challenges of creating interactive dashboards Information needed by the C-suite Source: Moody's AnalyticsĮqually important is having the available information much more quickly – ideally in real time – and in a format that is readily understandable. Both historical and forward-looking perspectives are critical for effective risk-based decision-making.įigure 1. There are two aspects to assessing the interaction of these high-level measures: understanding the historical (e.g., year-to-date) performance of the firm tracked against their strategic business plan, and modeling the interaction of these measures over future time horizons under differing stressed scenarios.įigure 1 illustrates the type of information to which we believe C-suite executives need to have access. These three factors need to account for the entire risk profile of the business. Therefore, their focus is turning to running their businesses more effectively and making informed risk-based decisions.īusiness decision-making fundamentally revolves around three high-level measures: profitability, capital, and growth. Our discussions with a number of insurance CROs, CFOs, and CEOs over the last six months or so indicate that they have the immediate regulatory situation under some degree of control. Managing more effectively with better risk-based performance metrics Firms must look for new opportunities to support growth, including designing products that are aligned with this new world and adopting alternative investment strategies to generate higher returns and manage costs. Margins are under pressure and firms have to work much harder to remain competitive and deliver returns to shareholders and/or policyholders. This continued regulatory burden, combined with a low interest rate/low inflation environment, is making generating value increasingly challenging for insurance companies. Hundreds of millions of pounds and euros have been spent on Solvency II projects that are now nearing completion, but insurers need to do more work to realize the potential business benefits of these investments.

For the last few years, insurers around the globe have been heavily focused on implementing regulatory initiatives, in particular Solvency II (and equivalent regimes), while also responding to the implications of International Financial Reporting Standard 4 (IFRS 4) and regulatory stress testing. There is, among many insurers, a feeling of regulatory “burnout” and disillusionment. Insurers have more work to do despite progress