By Rob Starr, Big4.com Content Manager
Life and Annuity Insurance: Step up or be sidelined is a recently published Deloitte study explaining how CFOs can help to navigate challenging marketplaces. Report author and Deloitte principal, Wendy Huang, highlighted a change in customer behavior, a need for modernized technology and a talent gap when we talked to her about the report and how CFOs must assume roles outside of the finance function.
“This is one in a series of papers that we are going to be publishing externally focusing on the role of the CFO and specifically within the sub sectors of financial services industries,” she said adding that market shifts, business evolutions, and technology innovations have changed the expectations for many CFOs and redefined the nature of their jobs in financial services.
“There’s a need for the CFOs to step into a far more strategic role to help the business navigate changes in the marketplace and manage customer expectations. CFOs must understand product implications as well as distribution strategies to support sustainable business growth. That’s why we decided to write this paper,” she said. She went on to make
a necessary distinction saying the CFO has a dual role as partner to the overall enterprise in supporting the CEO and divisional presidents and as a leader of a financial organization that’s undergoing a transformation. Life and Annuity Insurance: Step up or be sidelined represents a combination of interviews and survey results covering this changing landscape.
“There’s a CFO role in terms of protecting and preserving the assets of a company and there’s a role that centers around creating value and being a catalyst for the company,” Huang said adding the successful modernization of finance technology infrastructure and optimization of the finance service delivery model have allowed both the CFO and finance to have a seat at the table to serve as true business partners and drive broader enterprise-wide change.
With a streamlined service delivery model that focuses on operational efficiency, the Life and Annuity Insurance (L&A) industry requires its modern CFO to impact finance talent, business partnering, financial operational models, and business change portfolios while at the same time reaching across functions to tackle distribution model transformation, growth and capital allocation, regulatory obligations, and value creation through analytical insight. It’s a tall order made for an industry facing a talent gap, a need for modernized technology and a change in customer behavior simultaneously.
Huang describes the evolution around customer needs and preferences within a historical perspective. “Today, it’s not just about paying the premium and buying protection,” she says. “Now there’s deferred tax savings and annuities that come with modern products all the way into the retirement product that is much more about income.” She notes that product options and complexity have increased significantly over the years; however, with changing customer needs, a broader set of innovative distribution channels and more businesses tapping into underserved markets, there is a need to focus on simplifying and recalibrating the product portfolio.
Adding to the mix and the need for CFOs in the L&A industry to remain attuned to changing customer patterns is a generational shift.
“You also have customers that are Millennial, Gen X, Gen Y, all the way into those who are in their fifties and sixties and the way they choose to interact with the insurance company, the way they want to buy the product and the types of the products they want to buy are also very different.”
Read the full report here.