Why you should use a Target Operating Model (TOM) - based approach: Part 4
Achieving maximum business benefits from an IFRS Insurance implementation
Based on the four dimensional assessment of the organizational impacts of IRFS insurance used by the Deloitte member firms, it is possible to see how a TOM-based approach could contribute to the business benefits of a large scale regulatory-driven change such as that from IFRS Insurance:
- Part 1: Reporting to the Market
- Part 2: Strategy and Governance
- Part 3: Organization, People and Culture
- Part 4: Infrastructure
- When analyzed against a technology-heavy change program such as that arising from the new IFRS Insurance rules, the infrastructure dimension is the most tangible and readily understood element of the operating model where a TOM-based approach can deliver significant benefits
- The delicate status in which many insurers found themselves today as a result of the expensive efforts to build their Solvency II infrastructure heightens the disruptive risk from another change overlaid without any consideration as to how the operating model can be optimised to avoid rework and duplications.
- The involvement of multidisciplinary teams involving key stakeholders in finance, risk and actuarial to work with IT architecture experts could deliver superior levels of outcomes if conducted within a TOM-based approach to the IFRS Implementation.
- The design of the evolutionary pattern that the Solvency II infrastructure must follow to be safeguarded and to be leveraged for IFRS Insurance purposes is of critical importance for the majority of European insurers. The use of a TOM to guide this exercise would usually de-risk it and allows the insurer to increase the likely seizure of those Strategic Synergy Benefits that Deloitte expects to be particularly material in this dimension.