How can insurers enable the finance workforce of the future? The opportunity ahead

Explore how Canadian insurers can evolve finance teams for a post-IFRS 17 era with a human-centric approach to thrive in a competitive market.

This is a big moment for Canadian insurers. Across the industry, finance teams are shifting gears. Extensive efforts to implement IFRS 17 are largely complete. Insurers are navigating its implications in the daily course of business. And therein lies an opportunity. Especially given today’s complex operating environment, insurance companies that use this time to understand where the finance team stands today — and how it must evolve to succeed in a post-IFRS 17 world — can position themselves to thrive in a competitive market. Taking a human-centric approach to that process can help to bolster top and bottom-line results.

The years-long push to implement IFRS 17 in January 2023 was a significant milestone. This undertaking didn’t hold insurance companies back from functioning. But it certainly pushed many to move other priorities to the proverbial back burner. Huge as this regulatory change has been, IFRS 17 is not the only driver sending shockwaves through the sector.

Our EY Canadian Insurance Outlook 2024 shows a combination of factors are disrupting the industry. This includes the proliferation of advanced technologies, evolving customer demands and emerging risks (think climate change or environmental, social and governance considerations). These powerful forces make now the time for insurers to pause and ask: do we have the right people, with the right skills, doing the right tasks at the right place and time in light of what’s coming next?

How can insurers evolve finance teams to meet this moment best?

The good news is: insurers are well positioned to ask, answer and strategically address these critical questions now. Organizations in Canada bolstered their ranks in recent years, adding people, skillsets and expertise to implement and operationalize IFRS 17 effectively. Essentially, insurers have already built a solid pipeline of people and know-how. Going forward, these organizations can channel that vast breadth and depth of finance capabilities into an ideal future state. One in which the finance function shifts from a compliance and processing focus to an insight and decision-centred value proposition.

Empowering finance in this way isn’t just good for the organization, it can also be influential in attracting and retaining top talent over the long term.

Finance is shifting to an insight and decision-centred value-proposition

In this context, market research highlights the most important “from-to” role shifts in Finance can have the most significant impact on the workforce (as well as Finance’s ability to create value for business consumption, to foster growth and innovation).

New roles and skillsets emerge as functional capabilities evolve

That said, even the right kind of change can be hard. In one EY poll, only a small minority of insurance company finance and people leader respondents considered their efforts to have been highly successful, bearing significant improvements with expected business benefits fully realized.

Widen that lens to the broader market, and we see that workforce enhancements become a whole lot harder when organizations fail to make people — their needs and expectations — the cornerstone of strategic planning. Research that the EY organization carried out with Oxford University indicates that giving specific focus to a series of complex human factors can increase the probability of success to more than 70%. That’s why we embrace and recommend a humans at the centre approach to transformation.

Digging deeper, we’ve actually identified six key drivers which, when combined, help manage these kinds of emotional journeys — representing a formula to dramatically increase success rates for transformation overall. When change programs seek to inspire, care, build, empower and collaborate, each of these elements can increase success by a factor of 2.6x.

The six key drivers to manage emotional journeys in transformations

Leadership skills and behaviours to lead in a digital era

Insurers must put people first when evolving finance for the future

Putting people first as you seek to evolve finance (or other aspects of your insurance business) can go a long way towards realizing your business goals in the near term, and cultivating the kind of flexibility and resilience that helps a business succeed for years to come?

In a recent EY workshop with Canadian insurance leaders, a handful of top priorities emerged. This included the need to focus on:

• Developing skills
• Improving collaboration and ways of working
• Clearly defining future roles and skills needed
• Acquiring and retaining talent
• Standing up working groups with plans to address culture and employee experience, as well as leadership skills

How can you apply this thinking to evolve the role of finance to position your insurance business to succeed? At EY, we recommend considering three foundational steps:

1. Set a clear vision for the ideal future state of your function. What are the business goals? Which disruptive forces are most likely to influence finance as the business pursues sustainable, profitable growth? Knowing where you’re headed empowers you to reverse engineer the future state of your finance team to the big picture overall.

• At this stage, put humans at the centre of your approach by asking: How can finance evolve to foster collaboration, agility and innovation while adopting new ways of working?

2. Systematically assess and map current finance capabilities, structures, interactions and roles. As you work through this analysis, gaps and overlaps will begin to emerge. You can then channel this insight to sketch out the future-state roles and skills you’ll need for finance to succeed, with appropriate weighting in terms of capacity, and how these people will connect and interact through their work.

• At this stage, put humans at the centre of your approach by asking: How are roles and skills changing in the finance function — and how must they continue to change?

3. Design and implement a compelling future state you can work towards. The best action plans connect organizational structures, roles, capabilities, collective culture and individual behaviour. Success depends on your ability to weave these areas together in a human-centric framework. You want to think beyond finance systems, processes and procedures to create a vision capable of attracting and retaining talented people who are motivated by a purposeful mission

• At this stage, put humans at the centre of your approach by asking: How do we manage talent to maximize employee experience and business outcomes?

What’s the bottom line?

Now’s the time for Canadian insurers to look inward and determine if finance teams have the people, skills and alignment needed to navigate a post-IFRS 17 world. Take this opportunity to define a clear vision for the future of finance, and then dig in to chart an actionable roadmap to evolve with your people in mind.