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Better together - why insurance firms must modernize their Finance and HR applications

Nicole Carrillo Profile picture for user Nicole Carrillo July 10, 2024
The regulations and statutory requirements around insurance can seem like a barrier to modernizing legacy systems. But making the change can bring real-time insights, as Workday's Nicole Carrillo demonstrates with some customer examples.

Insurance concept © Jirsak -
(© Jirsak -

Many insurers have yet to move to a fully modern, digital platform for their core enterprise Finance, HR, and analytics applications, which are still running via standalone and often outdated systems.

Organizations are then challenged with siloed data that deters them from gaining the timely business insights that they need to be more agile and make better, faster decisions.

And their employees? Their time is then spent conducting non-value-adding tasks such as manual processes, reconciling data, and processing transactions instead of aligning to key priorities that support the business. Insurers are unable to take advantage of the power of their data and leverage the insights to remain competitive in the marketplace.

According to a recent IDC InfoBrief sponsored by Workday [From Legacy to Leading: How Modernizing Core Business Areas Can Propel Insurers to Resilience, IDC #US50932123 August 2023], 70% of insurance providers face delays of more than three days in monthly financial report completion, while 60% face fatigue with data reconciliation.

Unsurprisingly, more than four-fifths (83%) plan to modernize their Finance and planning operations with cloud migration or system updates as investment priorities.

The data housed in the legacy and disconnected systems makes it complicated, if not impossible, to accelerate organizational growth. Uniting all data — including from Finance, HR, and analytics — into one system allows for insurance organizations to have confidence in their data and a complete view of the state of the business.

Address regulatory and statutory requirements

Insurers operate in a heavily regulated industry and are required to build significant data preservation mandates to meet regulatory and compliance standards. As a result, many insurers may have felt it was less risky to remain in a legacy environment.

And there simply wasn't a pressing need for insurers to embrace change and move forward, compared to a sector like banking. As Amy Smith, SVP & Chief Accounting Officer, CNA, comments:

No-one changes their financial systems for fun. It's a major undertaking and finance folks are probably naturally risk-averse in a lot of ways, especially when it comes to their accounting systems and the core of that.

Why should insurers change their technology now? The emergence of new technologies like generative AI and LLMs (Large Language Models), the maturity of cloud computing, and modern data management methods, makes it a huge, missed opportunity to remain on old systems rather than tackle moving to a modern platform.

The threats this poses on insurance organizations include the gaps developed in data security, system availability, and compliance processes. Accelerating insurers’ digital transformation not only unites their data, but also establishes trust within their organization that their greatest asset – data – is secure.

Put Finance teams in control

A unified data model, preferably one that is fine-tuned to the insurance industry, is essential to providing rapid response to customer questions about claims or policies, as well as simplifying regulatory and statutory reporting. It is also a prerequisite to harnessing AI for advanced analytics.

A modern reporting and analytics platform allows insurance professionals to configure reports and dashboards to their own requirements without IT assistance. And a modern UX makes it easier for employees to find information and complete tasks. End-to-end automation eliminates many manual tasks, reducing time-to-close and ensuring businesses can rapidly adapt to change.

When CNA chose to change out its financial systems, the business opted for a unified system using Workday technology. As one of the largest US commercial property and casualty insurance companies, with over 6,000 employees, it was running a complex network of legacy finance systems. These systems required significant customization, leaving finance dependent on IT for process execution. The firm also wanted to become more agile, gain access to real-time data, and accelerate the close process.

By consolidating five legacy systems into one cloud-native system, CNA now has access to real-time financial insight. Tasks including system updates, cost allocations, financial reporting updates, process changes, and ledger management are now managed by the finance team rather than IT.

The insurance company has seen 30% annual savings on its finance system, a 27% improvement in IT efficiency, and a 59% reduction in ledger accounts, as a result of the switch.

When configurable, a modern platform allows for this level of efficiency and adaptability. It gives time back to your team by automating routine journal entries and finance processes, reducing the hours or days for a close.

Having the policy and claim data detail in the general ledger makes making journal corrections easier and faster. These cloud capabilities enable organizations to reduce costs and fully empower your finance team.

Unite Finance and HR data

Employees play a significant role in enabling a company’s future success. With demographic shifts in talent and digital natives entering the workforce, the need to have modern technology and composable tools is now a requirement for most insurance organizations.

Unum faced this exact problem. The business was operating a complex network of 39 HR and financial applications. The majority of these were on-premise, rigid, and restricted to a limited user base. This left finance and HR teams juggling multiple data sources and an outdated capability set. Unum realized it needed to update its enterprise applications to a more modern approach.

Unum turned to Workday to help reduce manual, administrative tasks and simplify its IT landscape. More than 20 corporate applications were consolidated into a single system. The Workday technology has equipped Unum with tools to drive strategic, data-driven business decisions.

The move to Workday resulted in cutting the number of HR and Finance systems by more than half, freeing up valuable staff time and speeding the year-end roll-forward process from days to hours.

The automation of many routine tasks allows employees to redirect their focus to strategic work. With the added time back given to them, people can focus on upskilling to increase their technical skills, such as data analysis, underwriting, and rating in insurance. Enabling a workforce with a future-ready environment keeps their skills current and cutting edge.

Access a world of insights with a modern enterprise platform

The amount of data that the insurance sector has access to is both a challenge and an opportunity. Take all the data collected by sensors in cars, home appliances, and smart systems. That detail is valuable information that insurance organizations could use to manage pricing, and mitigate and prevent risk. And that’s just one small example of the vast amounts of data the industry has access to — but not if they remain on legacy systems. 

Without data stored and managed in an industry-specific integrated platform, running separate enterprise applications leads to information silos. This makes it difficult to get an accurate, up-to-date, single view of the business, which is particularly important when it comes to finance.

A lack of a modern enterprise application platform also equals a lack of flexibility to adapt, grow, and deliver on strategic initiatives. You need the right data at the right time, to make the right decisions. Empower your Finance and HR teams to take ownership over your data and guide the future of your insurance organization.

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