LONDON, July 13, 2021 — Global life and property and casualty (P&C) insurers want to improve the efficiency and auditability of their processes and close the gap between their current use of automation and where they aspire to be in five years. These key learnings stem from a new survey by Willis Towers Watson. The Actuarial Reporting Automation survey queried life and P&C insurers on how they use automation today in their valuation (life) and reserving (P&C) processes and where they aspire to use it in the future.
“Insurers are looking to transform actuarial processes to achieve greater efficiency and efficacy.”
Max Drannikov,
Global Product Leader
Business Process Excellence, Willis Towers Watson
“Insurers are looking to transform actuarial processes to achieve greater efficiency and efficacy, enabling more granular analysis and more frequent and timelier insights from their data,” said Max Drannikov, Global Product Leader, Business Process Excellence, Willis Towers Watson. “Unfortunately, achieving this is a challenge due to several barriers, including limited time, staff and poor data quality. To achieve their objectives, the first step for insurers is to leverage automation to create the time and space necessary to invest in and achieve their ambitions.”
Most life companies queried in the survey said they currently use either ‘no automation’ or merely ‘some automation’ and conveyed that assumption processes were their least automated core areas of a valuation process, while data processes have seen the greatest investment to date. P&C insurers echoed the same sentiments that they also currently use no or some automation and revealed that engagement with senior management was their least automated core area of the current reserving process, while data processes were the most automated function.
“There are significant opportunities for life and P&C insurers to embrace automation,” said Drannikov. “We have seen life insurers gain value from automation around model point grouping, allocation of IFRS 17 cohorts and economic capital processes. Many challenges P&C insurers face stem from reliance on multiple data sources and coordinating external/internal teams — they can combat this by automating data processes.”
According to the survey, the life industry aspires to deploy ‘some’ or ‘strong’ automation over the next five years with assumptions, audit trail and results production the top three core area of the valuation process where they will focus. The P&C industry also aspires for some or strong automation over the next five years with assumptions, audit trail and senior management engagement the top three core areas of future focus in the reserving process.
“Automation is not just about technology and selecting the right tool for the job,” said Drannikov. “Insurers should consider all possibilities when looking at which processes to automate and the level of re-engineering required. Identifying quick wins to free up time that can be reinvested towards a large-scale transformation is often a key enabler of clients’ automation ambitions. The whole team must be engaged throughout deployment to ensure they embrace the solution.”
“Further, the impact of COVID-19 and various global 'lockdowns' coupled with current uncertainty around the speed of recovery from the pandemic has also accelerated the drive for automation, which has rapidly moved up on the C-suite agenda over the last year, with many looking to activate such plans.”
Representatives from 52 life and 66 P&C companies across the world, including some of the largest multinational and domestic insurers, participated in the survey. Life insurers responded to questions covering data processes, assumptions, ESG, model execution, results production and audit trails. P&C insurers responded to questions covering data processes, loading/setting of supporting assumptions, loss reserve calculations, results production, senior management engagement and audit trails.
Within each section of the surveys, respondents were asked questions regarding the level of automation they currently use and what they would like to achieve over the next five years. These answers were then plotted on a scale by Willis Towers Watson and turned into an 'automation score', where 0% represents no automation and 100% represents full intelligent automation.
Willis Towers Watson’s Insurance Consulting and Technology business has over 1,200 colleagues operating in 35 markets worldwide. It is a leading provider of advice, solutions and software – primarily to the insurance industry. Its consulting services help clients manage risk and capital, improve business performance and create competitive advantage – by focusing on financial and regulatory reporting, enterprise risk and capital management, M&A and corporate restructuring, products, pricing, business management and strategy.
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.
