The better the question
Can automation reduce cost by creating better financial reports?
Swiss Re was looking for a way to address internal inefficiencies within its operations.
The global insurance industry has long struggled with cumbersome working models. Insurers have to deal with a multitude of reporting standards. Many reporting processes remain manual, meaning both data and people routinely go underutilized. All this leaves companies operating less efficiently than they otherwise could be.
Swiss Re recognized the opportunity to address these issues in its own organization. Despite being a technology leader in many areas, there were a number of pain points within its business that Swiss Re was eager to rectify. Primarily, its ambition was to drive efficiency by moving from a 55-day closing process to a 5-day one. In order to do this, it needed a comprehensive overhaul, a more holistic approach looking at data, systems, process and people (DSPP).
So, Swiss Re began an overhaul of these core business practices. The main driver: to fully modernize and streamline its accounting systems using the latest technology and create an operating model that would help it defend its market-leading position.
days Swiss Re’s target close time, down from 55 days.
In particular, the heart of the new solution would be a powerful, single, standardized system and general ledger, supported by a reimagined Target Operating Model (TOM). This, Swiss Re hoped, would reduce its operational and compliance risk, increase transparency and outflank the competition. And it set itself a range of concrete goals:
- Bringing close process times down from 55 days to 5 days
- Achieving a 15% reduction in annual finance costs
- Integrating a range of accounting processes into a single SAP-powered platform
However, all this required a great deal of organizational and technological transformation. EY, who has had a working relationship with Swiss Re for a number of years, was the ideal partner to deliver on these ambitions.
The better the answer
Bringing digital harmony and improving financial reporting
By overhauling internal processes, EY and Swiss Re were able to deliver significantly improved operating outcomes.
Swiss Re initially engaged EY among multiple vendors to help it achieve its DSPP transformation targets. During this engagement, EY emerged as the insurer’s leading partner on operational and technological fronts, and helped the company implement the accounting technology solutions provided by EY's alliance partner, SAP.
In its role of central transformation partner, EY established the following goals:
- Configure an SAP general ledger and a cost transparency solution for all countries in scope
- Support the design and development of a TOM for several of Swiss Re’s business units – including financial operations, organization, and reporting – to enable the five-day close target
- Assist in defining the organization target set up
- Design and implement standardized, simplified and automated target setup
- Eliminate existing complexities wherever possible
- Achieve end-to-end efficiency involving other finance functions
- Coordinate finance dependencies with non-finance units
Teams from both firms worked closely together and gathered critical insights using a collaboration hub exercise, allowing them to exchange ideas and co-author the new TOM.
The foundational technology underpinning the transformation is the SAP S/4 HANA General Ledger, an innovative SAP software offering that allows for large-scale enterprise resource planning. The software provides for parallel accounting by managing several parallel ledgers for different accounting principles. It also integrates legal and management reporting, enabling Swiss Re finance professionals to quickly perform internal management reporting in parallel with legal reporting.
SAP joined the transformation initiative with Swiss Re and EY was critical in helping manage the strategic implementation of these solutions.
The global nature of the project meant that EY was able to bring together a wide range of its talented experts from around the world, spanning Zurich, Hong Kong, Singapore, Taiwan, and the US, with specialties in tax, legal, finance transformation, and technology.
While implementing the right technologies and processes was essential to this successful transformation, placing humans at the center was vital. “It was not just purely an SAP-driven decision or a system-driven decision, but the combination of data, systems, and processes. But more importantly, it was the combination of people from EY and Swiss Re working together to bring their talent and great ideas. That’s what makes an ambitious transformation journey like this a success,” says Phil Vermeulen, a Transformation Leader and Client Relationship Partner at EY.
The better the world works
Process streamlining creates long-term business value
Swiss Re was able to take meaningful steps toward meeting their efficiency goals, supported at every step by EY.
As of 2021, EY continues to bring thought leadership and innovation to Swiss Re as they continue their journey to greater efficiency and better outcomes. To date, the partnership has yielded a host of tangible DSPP results that continue to deliver positive returns throughout Swiss Re’s organization. These include:
- The development of a comprehensive TOM
- The creation of a global template defined for existing processes, for 85% of all ledger-related functions
- Closing times were reduced to five-days, helping Swiss Re achieve its highly ambitious five-day target
Ultimately, this multi-vendor initiative not only streamlines and optimizes Swiss Re’s operating model and accelerates process timelines, but also allows the insurance provider to tap into its enormous data assets for improved business outcomes, now and beyond.
“Having a fast, accurate and reliable connected system in place that provides continuous accurate insights into profitability and risk across the group, so they can deploy their capital more effectively is a big differentiator and a value add,” says Phil Vermeulen.
EY consistently adapted its role at every phase of the project, moving from agile business analysis provider to valued project co-lead in lockstep with Swiss Re. Today, we continue in our partnership, collaborating on yet more exciting innovations, including piloting EY’s Intelligent Metrics Navigator (IMN). The IMN is a tool developed in SAP Analytics Cloud (SAC) to help firms with the challenge of combining financial data from multiple sources into holistic business steering dashboards.
Thanks to expertise like this, EY can continue to innovate for its clients, and deliver far-reaching transformation programs that can make them ready for the demands of the modern world.
Christina Horvath, Director, Financial Services Consulting, Ernst & Young AG contributed to this case study.