Insurance

Adaptive Planning provides insurance companies with a Corporate Performance Management system that facilitates planning and reporting revenues and expenses across a complex organization with a large number of dimensions, such as state and product line, and to produce both statutory and GAAP reporting.

Planning & Reporting Challenges

The insurance sector of the financial services industry has gone through major changes in the last decade, as a result of globalization, regulatory changes, and the recent financial crisis. Furthermore, the 2010 Patient Protection and Affordable Care Act calls for sweeping changes, including strengthening insurance company regulation.

In the United States, insurance companies are regulated primarily at the state level. This means that insurance firms must deal with up to 50 different state regulatory agencies and 50 different sets of state regulations. In addition to complex statutory reporting, GAAP reporting is often also required.

In addition to planning and reporting by state, insurance companies typically need to plan by other dimensions, such as business line, product family, and premium type. Detailed allocation schemes are often necessary to plan and report company revenue and profit by state and by product lines.

Timely and accurate analysis of key performance indicators is critical for these companies to reduce risk and manage costs effectively throughout the economic downturn. They require nimble planning and rolling forecasts in order to be able to quickly shift gears from growth mode to cost control mode, or vice versa.

Spreadsheet-based systems are inefficient, error-prone, and fundamentally unsuited for the complex, dynamic planning and reporting required by insurance companies.

The Adaptive Planning Solution

Financial planning and analysis in the insurance environment, then, requires a flexible budgeting, forecasting, and reporting solution with the ability to:

• Accurately plan revenues and expenses across a complex organization with a large number of dimensions
• Produce both statutory and GAAP reporting
• Perform what-if analyses for varying levels of growth
• Have ready access to timely and accurate key performance indicators necessary to reduce risk and manage costs

Adaptive Planning has been successful helping dozens of insurance companies streamline their planning and analysis, because it has allowed them to:

• Plan for and consolidate organizations across multiple dimensions, including locations, states, product families, and premium types
• Plan and report in different formats to meet both statutory and GAAP requirements
• Model revenue with multiple dimensions, and using drivers such as gross written premiums, loss ratios, and commission ratios
• Allocate expenses from departments to states and product lines
• Model integrated P&L, balance sheet, and cash flow statements
• Perform frequent re-forecasts and what-if analyses
• Use dashboards to analyze key metrics, including sales per employee, billable and paid man hours, utilization of billable resources, etc.
• Use reports to perform variance analysis, including drill-down into underlying transaction detail
• Distribute report books via email for financial presentations such as board packages
• Improve accuracy and turnaround time in the planning and reporting process, and conduct frequent re-forecasting

Furthermore, Adaptive Planning’s Software as a Service (SaaS) model is a natural fit for the insurance industry, for the following reasons:

• It provides exceptional value. Adaptive Planning’s SaaS solution provides a five-year ROI of up to 650% compared to using spreadsheets, and has a total cost of ownership that’s up to 77% less than on-premise alternatives. And it’s low-risk, with the options of free trials and phased implementations.
• There is no IT involvement required. As a SaaS solution, no new hardware, software, or IT support is required for initial implementation or ongoing maintenance.
• It’s intuitive and easy to use. Adaptive Planning’s SaaS infrastructure and CPM engine save time and effort with built-in intelligence. Customers can avoid the wasted time associated with spreadsheet-based systems. And its web-based, highly-customizable, Excel-like interface is easy for all types of employees throughout a company to learn and use.

Select insurance customers include: