The insurance sector is facing a number of challenges that may appear to be structuring, such as adapting to regulatory and competitive constraints in an inflationary environment. Whatever the organisation chosen, compliance, operational excellence and performance will henceforth depend on the quality of the Middle Office and its industrialisation. This is the conviction of insurtech Apidata, which has made it the core of its business.
The revolution at work is not just digital. It’s also financial and regulatory: compliance with Solvency 2, IDD (Insurance Distribution Directive), GDPR (General Data Protection Regulation), LCB-FT (Fight against Money Laundering and the Financing of Terrorism) and, tomorrow, CSRD (Corporate Sustainability Reporting Directive) is leading many players in the insurance sphere to make choices while ensuring that their core business remains secure. As a result, they are deploying multi-channel distribution and multi-management strategies.
Securing your business
The insurer’s job is to bear risk with complete financial security. This is the mission of the actuarial, internal control, risk management and compliance teams. “The middle office as we define it controls the entire value chain,” explains Christophe Burlot, Apidata’s Managing Director.
Paradoxically, the digital transformation of the Middle Office is lagging behind that of the front office (customer relations) and the back office (policy and claims management). “But we believe it’s crucial,” continues Christophe Burlot. All the more crucial as it must enable all activities to be controlled and steered uniformly, independently of the organisations involved – the key to success. “Having a single management tool guarantees the complete security of your business”, observes Christophe Burlot.
Maintaining control
“The insurer must be in control of his data processing model, and therefore of the valuation of his portfolios. Delegation in no way prevents this control!“ An insurer who decides to delegate management must not lose control of its technical risks.
The regulatory environment may seem like an obligation, but it is in fact a reminder of the fundamental need for control.
Gaining agility
Having an automated, high-performance Middle Office also means greater agility. Christophe Burlot explains: “The risk carrier must be able to adapt to market constraints in complete security. He can decide either to outsource certain distribution or management activities, or to reinource them.”
This is undoubtedly the best way to adapt to an increasingly fast-changing market, where brokers and delegated managers have succeeded in catching insurers off guard thanks to their agility and the performance of their organisations.
What’s more, the diversification of distribution channels and the personalisation of insurance offers are considerably increasing the need for data collection and processing.
Improving operational performance
While the preceding points demonstrate the need to integrate the Middle Office as a key element in the value chain, we still need to build or imagine the model that will enable us to respond uniformly to the insurer’s key functions: actuarial, compliance, internal audit and risk management, without causing budgetary drift.
Apidata’s vision of the Middle Office is to approach this activity through a modular, open ecosystem, in which each player is considered as a business contributor able to provide qualified information.
“For all these reasons, I am convinced that the quality of the Middle Office is at the heart of the transformation of the insurance industry, and that this can only be achieved through its industrialisation,” concludes Christophe Burlot.
Read the article on the L’Argus de l’assurance website