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Why insurers must reimagine planning and performance management

Insurers can transform planning and performance management to deliver forward-looking insights.

In brief

  • Today’s finance function must seek new ways to enable stronger performance, rather than merely reporting the numbers.
  • Stronger and more integrated planning and performance management capabilities are key to drive more informed and confident decision-making.
  • Use planning capabilities as a mean to serve as trusted business advisors delivering continuous insights, robust analysis and timely decision support.

In an era of intensifying regulatory scrutiny, rising investor expectations and increased competition, insurance business leaders are eager for better business information. Ideally, they’ll have real-time access and the ability to explore it on their own. However, most organizations – even those with dedicated financial planning and analysis (FP&A) teams – lack the tools to produce timely and forward-looking insights.

Instead of FP&A functions serving as curators of budget and forecast data, insurers should aim to create a planning and performance management capability that serves as an oracle for the business, generating timely, high-impact insights into the performance drivers of results and producing a persuasive business story for external stakeholders.

The latest report, Finance in insurance reimagined: Building a strong planning and performance management capability, highlights both why now is the time for finance and other leaders to rethink and expand their planning capabilities and how to thoughtfully and purposefully realize the powerful vision moving forward. This report is the latest in the EY Finance in insurance reimagined series. Previous installments covered the need to transform the finance function at large and reimagine service delivery models.

Realizing the vision for the future of finance in insurance will take considerable effort, but the potential upside makes it worthwhile. The value proposition for enhanced planning and performance management is especially strong relative to on-demand decision support and modeling, where management can see the impact of potential actions and decisions across financial frameworks and key metrics for performance and earnings.

Unique challenges and complexities

Historically, insurance company FP&A functions have focused on “reporting” more than “planning and analysis.” Today’s FP&A functions are constrained by siloed data sources, manual processes, complex models and rigid legacy technologies. As a result, the scope of management information is often quite narrow, with an emphasis on near-term earnings emergence under limited scenarios.

It’s no wonder that significantly more time is spent on production of reports than on analysis and decision support. End-to-end processes are disconnected, manual and reliant on spreadsheets. Data hierarchy inconsistencies between actuals and projections limit comparability and analysis, and change year by year, which creates reconciliation challenges. Life and annuity insurance companies face a unique set of complexities: they operate under multiple accounting frameworks that not only are independent from one another but also include their own complex and product-dependent valuation rules.

Beyond the business value of integrating and standardizing data, additional forces have increased the urgency to transform current planning practices:

  • New accounting rules, including IFRS 17 and LDTI, that require more granular disclosures and reporting based on current estimates.
  • Investor requirements for more detailed and transparent information, including for new topical areas such as ESG.
  • Increasing market volatility and intensifying competition, which place a premium on decision-making.
  • Enhanced technology capabilities, particularly the additional granular collection of policy and cohort-level data required for new financial reporting standards.

These forces help explain why senior business executives routinely turn to finance, actuarial and risk teams for customized ad hoc reporting. The regulatory requirements present a practical opportunity for insurers to make investments that actually benefit the business, in addition to achieving compliance.

Off-the-shelf planning tool capabilities are not designed with the life and annuity insurance industry in mind and can’t model insurance liabilities, assets and capital to the degree insurers need. Thus, they must be modified to deliver the tools and capabilities insurers must have, including actuarial modeling, asset modeling, capital planning, and integrated and aggregated planning.

The attributes of highly effective planning and performance management

Planning and performance management delivers what stakeholders need, including business insights that are:
  • Timely: Shorter and more frequent planning cycles to respond to business shifts.
  • Dynamic: Flexibility to drill into performance trends and business drivers, respond to questions and perform what-if analysis.
  • Comprehensive: Covering a full range of consistently applied frameworks and KPIs that decision-makers manage.
  • Integrated: Integrated financial projections across reporting frameworks that support multiple business uses.
  • Multi-scenario: Forecasts across adverse and favorable economic and noneconomic scenarios.
  • Transparent: Attribute impacts of forecast changes and drill into drivers.
  • Inclusive of corporate and business unit views: Satisfying reporting and analytical needs of corporate and business unit stakeholders.
  • Comparable: Forecast and actuals aligned to support comparability and explain drivers.

A future model for effective planning and performance management

In the future, the top planning and performance management teams will be notable for their:

Ability to produce high-value business insights – at scale, repeatably and in real time

To empower stakeholders with insights for more informed decision-making, the planning capability must be designed to produce dynamic analysis rather than static reports. Reporting data must be accessible across frameworks and scenarios and at a granular level, with alignment of budget, actuals and projection data.

Efficient and flexible processes, powered by next-generation technology

To deliver timely business insights, reporting and analytical processes must be efficient and flexible. The complexities of insurance products, financial reporting frameworks, capital frameworks and asset classes require an integrated architecture that connects actuarial, capital and asset projection systems with next-generation planning technology.

By replacing spreadsheet-based processes, advanced planning tools can help insurance organizations solve for the inherent complexities of insurance company financials. Next-generation planning tools can transform key capabilities by managing the overall process and workflows, as well as non-actuarial and investment modeling; organizing data; and providing interactive dashboards and visualization tools.

Integrated operating models with the right skills and talent organized in effective ways

Traditionally, functional specialists have responsibility for specific areas of planning and budgeting, often working independently with limited communication within the team. Collaboration can be achieved through an integrated planning approach that drives action through connected data, people and plans across the enterprise, utilizing consistent data sets and dynamic assumption management.

Across the industry, management’s ultimate objective is to enhance the trade-offs between risk and return, as they manage financial performance across multiple accounting frameworks and a range of uncertain scenarios. Business leaders make decisions every day about product mix, capital deployment, investment allocation, business investments, reinsurance and other matters.

The vision for more effective planning and performance management starts with confirming that business leaders have the information they need to make these decisions confidently. Further, leading finance groups will use their planning capabilities as a means to serve as business advisors that deliver continuous insights, robust analysis and timely decision support across the business.


As the insurance marketplace becomes more dynamic, planning and performance management is a critical capability helping insurers make informed and confident decisions. Just as the business rethinks and transforms its product offerings for the future, today’s finance organizations must seek new ways to facilitate stronger performance, rather than merely reporting the numbers. By enhancing planning and performance management capabilities, finance leaders can help the business produce better outcomes.

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