Driving growth and efficiency for insurers
Andy MacLennan, vice president of solutions management at FIS®, discusses ongoing advances in actuarial modelling technology, and how FIS is also helping insurers to manage climate risk
When it comes to actuarial modelling, what areas are insurance clients asking FIS to support?
Now that most insurers that need to have implemented IFRS 17, we are seeing consistent demand to further improve their modelling and reporting processes. Firms are looking to drive down costs and accelerate – or de-risk – their reporting processes via two main routes, both of which we are able to support.
The first route is ‘model run tuning’ for performance and efficiency. Our consulting teams have a wealth of experience in helping clients optimise modelling for faster runtimes and reduced storage costs, while delivering the same, plus enhanced output, for reporting. We do this by optimising code, run set-up processes, infrastructure usage and data and results handling.
The second is process automation, which we are seeing demand for in all regions, particularly from our larger clients who have more complex reporting demands. FIS Process Orchestrator and FIS Process Manager provide solutions for small and large firms respectively, with Process Orchestrator being an easy-to-use automation tool that works with components of FIS Insurance Risk Suite (formerly Prophet), and Process Manager providing a holistic and comprehensive option.
What technology improvements can we expect FIS to make over the next year?
This is an exciting area for FIS and our clients, and one where we are well placed to succeed as one of the world’s largest financial technology companies.
FIS’ capital markets team comes backed with extensive technology expertise that helps drive our product roadmap. Artificial intelligence (AI) is an area where you would expect us to be focused and I see a wealth of opportunity for us to deliver advances in product usability, efficiency and ultimately cost reduction.
It’s important that we deliver real, usable product enhancements and not just novelty features to make marketing headlines. So, we are working closely with some of our client base to identify the most effective ways we can use AI. Although some really exciting and fast-moving solutions are being developed and enhanced, such as ChatGPT, Copilot, Apple Intelligence and AWS Q, compliance and governance requirements in a heavily regulated financial services market mean we must adopt the technology carefully and in the right places.
FIS will also continue to expand and develop our managed cloud services, adopting more cloud-native solutions, including software as a service, to meet the needs of a growing number of insurers moving to the cloud or expanding cloud usage across the globe. Our valuable partnership with AWS, as well as other cloud providers, ensures we can offer powerful integrated solutions.
We actively monitor and incorporate advances in computing technology and aim to make these available to our clients in a realistic, cost-effective manner. Model performance is extremely important to all our clients (and prospective clients), and we will continue to deliver this without sacrificing the transparency, flexibility or usability of the software.
Where is FIS seeing the greatest demand from insurers for its technology solutions?
Insurance Risk Suite is a globally successful actuarial modelling platform, with clients in more than 70 countries. In recent years, we have seen strong demand for our solutions to meet the compliance deadlines for IFRS 17 in Europe and across Asia Pacific. But our out-of-the-box solution has accelerated implementation for clients across all countries.
We have seen strong growth in demand for our managed cloud services in the Far East, where many larger insurers have a strong desire for centralised, well-governed infrastructure that can be delivered at scale on the public cloud. Use of our core modelling platform continues to grow in emerging markets, such as South America and Africa, where needs arise as companies evolve.
Does FIS offer or plan to offer any climate risk management and modelling tools for insurers to help them address sustainability?
Yes! We are very excited to have launched FIS Climate Risk Financial Modeler, delivered through our new software-as-a-service platform. This solution takes the flexibility and performance of Insurance Risk Suite’s core calculation engine and applies it to the new challenge of calculating physical risk and transition risk to meet regulatory requirements for all listed corporations, including insurers.
We have also developed code to support IFRS S1 and S2 disclosure requirements, and further emerging ESG requirements, making it freely available to all our licensed clients.
