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Dori Dwyer, VP, Financial Solutions, Fiserv Insurance Group, (Brookfield, Wis.)
Dori Dwyer, VP, Financial Solutions, Fiserv Insurance Group, (Brookfield, Wis.)
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Business Intelligence Capabilities Transform Accounting and Financial Systems

The possible introduction of principles-based reserve requirements and an OFC will necessitate a new level of data collection and analysis.

True business intelligence (BI) capabilities are revolutionizing the value insurers are realizing from their accounting and financial systems. Analytics, BI, operational data stores and data marts, and sophisticated dashboards and real-time scorecards are integral tools of financial analysis and reporting. It is critical that the data is presented in useful, customized formats so that patterns, trends, comparisons and progress against strategic goals can be understood and support decision making. In addition, right-sizing the data for the user/audience is an important new capability. Configurable views of the information must be made available via multiple presentations to adapt to the needs of users, including executives, board members, managers, actuaries, strategic planners and investment professionals.

Although P&C companies are accustomed to principles-based reserve (PBR) requirements, it's uncharted territory for life products and will require a new level of data collection and analysis. The NAIC recently proposed the insertion of new lines and columns for PBR products into current statement reserve reporting formats for life companies. Financial staff will need to adjust the account setup to capture this information and will need to segregate product information collected before and after the PBR effective date. Actuaries will need to use modeling, generate economic scenarios, develop risk measurement capabilities and perform sensitivity testing, to name a few requirements. In addition, the company's actuarial work will be subject to review by an independent review actuary.

The impact of an OFC is still unknown, but current proposals have a mix of federal and state regulatory oversight. Rates, rules, forms and agent licensing may be supervised on the federal level, but it appears likely that financial reporting will remain with the states. While many are hopeful an OFC will result in less reporting, experience tells us that the federal government typically finds a way to require more reporting.

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