This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Life Insurers Assess Financial Modeling Trends In Towers Watson Survey

Stocks in this article: TW

Chief financial officers (CFOs) from large and midsize life insurance companies agreed that financial modeling, an increasingly important tool for their business, remains a work in progress, according to a new survey by global professional services company Towers Watson (NYSE, NASDAQ: TW). The survey explored pressing financial modeling issues for life insurers, including model governance, business priorities and how insurers use financial models.

Survey results offer a view into where life insurers see limitations with their financial modeling. All respondents reported a certain level of confidence regarding their financial modeling results, though nearly two-thirds (65%) recognized the need for improvement. When CFOs were asked how satisfied they are with the timeliness of their models’ results, only 13% said extremely satisfied, and 17% said not at all. Most CFOs (91%) expressed uneasiness with the time required to interpret model results before their teams could actually begin acting on the information.

“Our survey revealed that despite advances made in financial modeling at many life insurance companies, there are ever-increasing demands placed on companies by their stakeholders to improve the speed and usefulness of their financial models,” said Cheryl Tibbits, director and life insurance consultant at Towers Watson. “However, new technologies are available, allowing for more improved and efficient approaches to financial modeling.”

Uses and Challenges

The survey assessed respondents’ varying levels of satisfaction with their organizations’ financial modeling capabilities by life insurance product type. Given a grouping of product types to choose from, CFOs indicated that long-term care and life reinsurance products need the most work, with half (50%) not at all satisfied with their modeling capabilities for long-term care products, while 36% expressed dissatisfaction with their financial modeling capabilities for life reinsurance products.

Insurers were asked about the biggest challenges they face in getting what they need from financial models and instructed to choose the top three. More than two-thirds (70%) named managing competing priorities as their biggest challenge, followed by run-time requirements (44%) and model features/functionality (39%). When asked which of these challenges they would address first, run-time requirements (22%) ranked as their most pressing priority.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs