Rethinking F&A, the digital way

Challenge

F&A is a complex process at the best of times, but for insurance companies, it poses an even bigger challenge. They have to handle a lot of sensitive data, comply with onerous regulations, and run complex processes for filing and paying claims. This insurer's F&A function was struggling, particularly because it had the extra complication of working across multiple jurisdictions. The costs of running the F&A function had risen and work had become fragmented – with similar functions performed in different locations, often in different ways. There were often multiple touchpoints for a single function, making it hard to finalize and consolidate accounts and report business results – even for internal use.

Challenges within the close process included:

• Elongated cycle times because of a lack of an effective way to track month-end close activity
• An audit trail spread across multiple individuals' email inboxes and sometimes in hard copy

Reconciliation challenges included:

• A suboptimal document archival mechanism and missing audit trails
• Unwanted rework due to repetition of backups.

Clearly, the carrier needed an F&A overhaul.

Solution

The insurer engaged Genpact to help restructure its whole approach to F&A, starting with evaluating a tool for close and reporting of accounts.

We started by working with the client to understand its target operating model and then analyzed a number of F&A technology solutions. Based on our findings, insurance market, and digital expertise, we recommended that the client should implement BlackLine, a cloud-based continuous accounting solution that makes use of configurable artificial intelligence-powered automation.

But in order for BlackLine to work effectively, we needed to restructure the F&A function. So we set up an F&A center of excellence to run standardized and centralized processes. And then we developed and implemented a plan to roll out the solution, onboard and train staff, and fully implement the technology.

When it came to the BlackLine implementation, we started by rolling out the task module, including month-end activities listing, external reporting task listing, and downstream workflow design. This solution has allowed the company to move from an Excel-based close calendar to an online close calendar with visibility across the company and real-time tracking capabilities. Employees now have defined accountabilities and a review checklist for end-of-month close activities, as well as enhanced metrics reporting to enable customized reports for the business' requirements.

Following this, we engaged with the company's finance leadership to improve the controls for balance sheet reconciliation and rolled out the account module, including bank reconciliation and technical balance sheet reconciliation. The insurer now sees the real-time status of account reconciliations across its entities and accounts are auto-certified using configurable rules – an outcome that has improved efficiency.

We've now expanded the use of BlackLine to manage repetitive deliverables in other areas such as payroll and benefits and tax and have gone from 80 initial licenses to over 150.

Impact

Genpact's BlackLine implementation and F&A center of excellence have improved efficiency across the board. The impacts fall into four key areas:

• Process: Standardized and consistent processes across all accounts with defined ownership and accountabilities
• Policy: Tighter controls now all components of reconciliation sit in the center of excellence
• Technology: The auto-certification of accounts using configurable rules has improved efficiency and reduced costs
• Metrics: The real-time status of account reconciliations across entities in one location means that metrics and reporting are much more reliable for internal use, and the company has a one-stop shop for management reviews and internal and external auditors

The client no longer has to worry about error, duplication, and spiraling costs. Its key F&A processes are standardized and centralized in a center of excellence run by experts and enhanced by technology that uses intelligent automation to improve efficiency and free up experts to add value elsewhere in the business.