10/14/2019 | News release | Distributed by Public on 10/15/2019 01:05
The persistent low-interest environment and low-cost structures of the new entrants providing fully digitized insurance products and services create a sense of urgency for incumbent insurance carriers to gain full transparency on cost and profitability by lines of business and products and reduce cost structures via cost transformation programs.
Connected Planning technology allows insurers to manage their profitability by lines of businesses, products, and distribution channels, help identify non-profitable parts of the business, and reallocate capital to where the company gets the best returns. To achieve this objective, the solution leverages driver-based cost allocation functionalities and helps also model sophisticated activity-based costing processes.
Additionally, the platform can be a technology enabler to practices such as zero-based budgeting programs, which aim to save costs that can instead be reinvested in areas where the insurance company achieves better returns.
Over the last few years, a resurgence of zero-based budgeting initiatives were observed in the insurance industry that generated sustainable cost savings and reinvested them in critical growth areas of the business.
In sponsoring zero-based budgeting programs or wider cost transformation initiatives, insurance CFOs can play a significant role in the pursuit of a profitable growth agenda.