Aligning Financial Processes After an Insurance Merger: Strategies for Success
Aligning financial processes after an insurance merger: Strategies for success
Aligning financial processes after an insurance merger: Strategies for success
Discover how EXL’s expertise in process standardization and advanced tools can transform your financial operations after an insurance merger, driving efficiency and growth.
Following an insurance company merger and acquisition (M&A) deal, the involved finance departments can be caught in a confused frenzy of sorting and agreeing on standardized processes moving forward. Details such as journal entries, budgeting, forecasting, charts of accounts, reporting, and line of business granularity will generally not align, and before progress can be made, the variations, redundancies, and system differences must be reconciled through some form of process standardization.
Without standardized processes, consistency, transparency, and scalability will be delayed, stunting any performance gains expected before the deal was struck. The result can sour many stakeholders on the M&A decision, despite all best intentions. To avoid this scenario, a comprehensive plan should be set in place in advance or, at the very least, as soon as possible after the transaction completes. A classic example of post-merger process standardization can be seen in EXL’s recent work with a UK-based global property and casualty (P&C) insurer who acquired a smaller insurance firm. The merger resulted in a siloed, limited environment, with licenses spread across ERP systems, less than optimal resource utilization, and a multi-level communications hierarchy that made information sharing difficult across locations. Career advancement under these conditions seemed limited. A consolidated structure would be necessary to drive process standardization, achieve scalability, and support future growth.
EXL addressed the assessment by establishing a tower-based center of excellence in which to direct process and resource improvement. Using EXL’s proprietary manual journal analyzer and AI-based RECONCILE tool, equipped with industry-specific business rules that automate data reconciliation, the team was able to quickly make recommendations to standardize manual journal entries and reconciliation processes. Resources were mapped to activities based on skill sets, and the resulting single delivery model served to improve governance across the newly unified finance department. It is important to note that in any post-merger activities – particularly in the area of process standardization – performance metrics be put in place to monitor and drive improvement. These should be crafted around the goals and analysis performed and agreed to up front, to ensure the plan reaches its desired end, on time and in budget.
EXL has established a long reputation for achieving results in insurance M&As. Our global team of expert consultants and technologists can help you quickly assess your roadmap forward, and bring to bear any resources or technology solutions required to maximize ROI post-merger through a unified finance operation.
Read our whitepaper to unlock the insights on post-merger integration in the insurance sector. Learn from real-world case studies and industry insights to address the top financial integration challenges.