The insurance industry is currently undergoing a significant digital transformation. This shift is driven by the constant need for increased efficiency, scalability, and agility in an ever-evolving business and regulatory environment. At the center of this transformation lies technology, which provides insurers with the tools necessary to manage a wide range of asset classes, maintain compliance, and generate accurate financial reports. Despite these advancements, many insurers are still shackled by outdated, “on-premise” legacy systems. These systems create data silos, necessitate manual processes, and result in operational inefficiencies.
These legacy systems present significant challenges, obstructing productivity, precision, and timely decision-making. To remain competitive, insurance companies must update their investment operations and accounting procedures by embracing advanced technology solutions and automation. Here, we explore five practical strategies to streamline insurance investment operations, ensuring readiness for future successes.
### Automate Trade Capture for Public and Private Investments
Operational efficiency hinges on real-time or daily trade capture, especially for complex asset classes like syndicated bank loans. These intricate assets often require manual intervention for tasks such as sourcing valuations, processing delayed draws, and managing fees, all of which can introduce human error.
By automating trade capture for both public and private investments, insurers can:
– Eliminate risks associated with manual data entry.
– Achieve straight-through processing (STP) across all asset types.
– Allow internal teams to focus on high-value activities, such as cash flow modeling and portfolio analysis.
Collaborating with a technology provider skilled in managing complex assets can equip your organization with the tools and expertise necessary to refine trade capture workflows.
### Automate Pricing, Valuation Updates, and Security Master Refreshes
Accurate pricing and valuation are crucial for effective investment accounting. By automating the integration of data from multiple market vendors for waterfall pricing, insurers can ensure timely and comprehensive valuation updates. Furthermore, automating security master refreshes helps classify securities correctly and apply the proper accounting treatment to updated holdings.
Automation of ratings updates and NAIC Securities Valuation Office (SVO) filing preparations also keeps insurers aligned with quarterly compliance demands. Through automation, these tasks can be handled effortlessly, reducing errors and the duration spent on manual checks.
### Perform Daily 3-Way Reconciliations
Relying on monthly reconciliations within legacy systems often leads to bottlenecks and delays in reporting. Forward-thinking insurers are moving towards daily tri-party reconciliations that involve:
– Balancing positions, cash, and transactions among managers, custodians, and the accounting books of record (ABOR).
– Capturing trades and valuing portfolios on a daily basis.
Daily reconciliations remove the pressure of month-end delays, allowing any day to be treated like a regular business day. Outsourcing non-core operational roles to a capable service provider can enhance this process further. These providers can serve as the initial line of defense in addressing discrepancies, escalating issues to internal teams only when necessary.
As a result, internal teams can allocate more time towards analytics, reporting, and strategic decision-making rather than resolving data inconsistencies.
### Leverage Automation for Document and Event Notice Processing
Handling alternative investments, such as private credit, commercial mortgage loans (CMLs), and limited partnerships (LPs), often involves a significant amount of manual work in processing notices and actions. Utilizing robotic process automation to automatically capture, digitize, and parse key event notices and updates helps mitigate the risks of manual data entry and processing delays.
These systems can:
– Digitally manage, interpret, and process extensive documents like credit agreements and event notices from general partners or agent banks.
– Automatically update and adjust rates or fees for private loans.
– Reconcile both funded and unfunded commitment values to avoid over-allocation.
– Centralize document storage for easy digital access.
By simplifying the management of alternative investments, insurers can expand operations without overburdening their teams.
### Streamline the Corporate Ledger Feed
Many insurers juggle multiple accounting bases, such as statutory, GAAP, and tax, making manual mapping of general ledger (GL) entries to corporate accounts across these bases both time-consuming and prone to error. Automating this mapping process can greatly simplify month-end and GL proceedings.
Cloud-based SaaS platforms, like SS&C Singularity, offer intelligent automation that provides:
– Seamless mapping of accounting journal entries to appropriate corporate ledger accounts by accounting basis.
– Real-time operational process visibility.
– Efficient, scalable month-end closing procedures.
### Why Modernization Matters
By updating the technological platforms and infrastructure underpinning their operations, insurers can efficiently diversify and expand their investment portfolios, exploiting new asset types and investment avenues for additional yield—all without increasing staffing or operational costs.
As insurers increasingly allocate resources to alternative assets and private credit, it’s vital to employ technology solutions that are agile and scalable. Outdated, spreadsheet-based workflows simply cannot manage today’s complex investment portfolios.
Modern technologies enhance the ability to:
– Adapt to evolving regulatory requirements.
– Capture and process both standardized and non-standardized investment activities at scale.
– Seamlessly integrate systems and processes across front, middle, and back offices.
– Provide real-time dashboards and KPIs for data-driven decision-making.
### SS&C Singularity: The Future of Insurance Investment Operations
SS&C Singularity is a cloud-based, multi-tenant platform, accessible via desktop and mobile, designed to revolutionize insurance investment operations. Featuring user-configurable online dashboards and advanced automation tools, Singularity enables real-time operational workflows, eases reconciliations, and augments the scalability of investment accounting across diverse asset classes.
Supported by a team of experts, Singularity not only shines as a leading SaaS platform but also offers outsourcing and co-sourcing services to bolster internal resources, enhancing scale and operational flexibility.
Explore how SS&C Singularity can streamline your investment operations. Request a demo today or download our infographic for more information.
### Conclusion
Streamlining insurance investment operations transcends merely eliminating inefficiencies; it prepares your organization for lasting success. By automating trade capture, pricing, reconciliation, and event processing, insurers can boost accuracy, productivity, and decision-making capabilities, freeing internal teams to focus on strategic and high-value tasks.
Don’t let outdated systems and processes hold your organization back. Embrace technology, refine your operations, and unlock the potential of your investment ecosystem.
