Like the insurance business, the tax function is driven by data. Its success is determined to a significant extent by access to and quality of data. That’s why our insurance tax team recommends asking four questions in mapping transformation or performance improvement strategies:
- Do you have a data transfer strategy?
- Can your data predict anomalies?
- Is your data an asset?
- Can you talk to your data?
When it comes to the organizational model, some insurers have had success by integrating their finance, risk and actuarial teams. This has resulted in increased data sharing among these groups – a necessary step
the imminence of standards such as IFRS 17.
It’s worth noting that tax leaders may feel limited in their ability to lead the organization forward in adopting advanced technology, integrating data sets and rethinking the tax operating model. For tax leaders, these questions arise:
- How do we properly connect or link into transformation-driven investments?
- How do we define the tax business case for technology investment?
- How do we engage the organization in a commitment to transparency in full data sharing?
The regulatory view
From Brexit and US tax reform to the EU’s mandatory disclosure regime and global indirect tax controversies, the regulatory environment continues to evolve, and remain uncertain. In some ways,
has never had a higher profile. It’s an issue in political elections worldwide and constantly in headlines of both the business and general press. Tax reform is not just happening in the US but around the world.
Insurers’ business models and organizational footprints were designed for an increasingly redundant international tax framework. The new system of rules that has emerged post-Base Erosion and Profit Shifting (BEPS) and post-US tax reform, as well as impending digital tax reform, requires an entirely fresh look at
model design. Certainly, tax functions need to review their organizational structures, tools, technology
talent. Understanding how the trends are likely to develop is necessary to support the design of a future state model that manages cost, reduces risk and shortens what could otherwise be a painful transition period. Tax directors need to ask: how do you navigate your way through one set of rule changes without falling foul of another?