Life insurer prepares for accounting changes | KPMG | GLOBAL

Multinational life insurer takes opportunity to prepare for accounting change on the horizon

Life insurer prepares for accounting changes

Life insurer tackles outdated actuarial modeling through cloud based technology in preparation of accounting changes

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Global Insurance Change Lead Partner

KPMG in Canada

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A multinational life insurance and wealth management company partnered with KPMG in Canada to deliver a full transformation of their life insurance actuarial valuation process in all business units across two continents. The key objectives were to eliminate complexity and unnecessary cost in the current operations by establishing a more globally consistent approach to valuation through changes in business process, valuation systems, data management and organizational structure. An additional objective was to enhance flexibility to respond to emerging business requirements.

Their current state encompassed multiple and inconsistent processes across lines of business, hundreds of actuarial models, a variety of modelling technology platforms and software versions, over 25 policy administration systems, and a reliance on desktop spreadsheet tools for reporting and analysis of modeling results. Staff were performing responsibilities that did not require actuarial judgment or expertise, such as preparing data for modeling, aggregating results for reporting and verifying completeness. It was recognized that regulatory and accounting standard changes on the horizon would add substantially greater operational complexity and cost to already-strained valuation teams.

KPMG member firms assembled a multinational team to support the multi-year transformation program. Solutions designed and delivered by KPMG included rationalized and standardized valuation models and data feeds; a centralized and standardized valuation data repository coupled with powerful data discovery and analysis applications; redesigned business processes and controls; and change management for regional actuarial shared service centers. KPMG also worked with the client to deploy the solutions in a secure and scalable cloud-based computing infrastructure, representing a significant innovation in the industry.

The benefits of the solution to date are simpler valuation process and controls; substantially reduced workload in valuation operations; more readily accessible data and more time for actuarial analysis during the quarterly close; reduced audit workload; and lower unit costs for computing and data storage. Just as important, the organization is better positioned to respond to upcoming regulatory and financial reporting changes which require more sophisticated actuarial modeling and analysis within the same time frames as today’s quarterly and year-end reporting cycles.

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