CFO imperatives amidst the changing landscape of India's insurance sector

Over the years, the role of a CFO has seen a strategic shift. CFOs traditionally used to be number crunchers who worked silently behind the scenes. Today, the role has undergone a colossal paradigm change. A CFO comes with a deep understanding of all aspects of an organisation, not limited to finance or aspects such as capital allocation, business agility, and resilience, mitigating operational risks, but across a wide spectrum including supply chain management, macro trends, digital adoption, and even ESG. Given that they work in tandem with the CEO, providing critical insights and advice on the potential outcome and growth opportunities for business initiatives, CFOs are well-positioned to play a pivotal role in shaping the future of their respective industries.

Within the insurance sector particularly, the role of a CFO has seen a remarkable evolution from merely heading financial operations to building and heading strategic corporate imperatives for insurance providers. In this sector as well, CFOs are actively driving decisions for business, reinsurance, enabling capital optimisation, bringing in analytical thinking, and more. This is also largely due to the digital transformation witnessed by insurers, coupled with growing regulatory demands, compliance and data-governance benchmarks, etc. Since CFOs are at the center of it all, they can stay at the forefront of leading the shift in the ecosystem, and helping insurers navigate the changing landscape.

With their understanding and real-time view of the company’s finances, market scenario, and regulatory climate, CFOs can act as strategic advisors, leveraging the right data and insights to tap newer opportunities that can help businesses scale. Here are a few of the redefined imperatives of CFOs in the insurance sector today:

Building data-led and analytics-driven insurance business models:
Technology, analytics, and big data have changed the landscape of insurance companies. They can achieve significant competitive advantages by driving operational agility to respond to changing customer needs. With the rapidly growing insurance market and changing customer sensibilities driving this demand, insurance providers are driven to automate their processes and bring in efficiencies to improve turnaround time and cost efficiency. The acceleration of digitalization has had an impact not only on front-office areas such as product development and customer interaction but also on finance. CFOs can lead technological transformation while keeping the company’s balance sheet healthy by being imaginative, agile, and forward-thinking. This will increase efficiency and enable optimal utilization of resources.

Managing long-term profits while building a sustainable business and positioning the company as a responsible corporate citizen: Along with technology, integration of CSR and ESG compliances into the value chain has also become more mainstream than before. Assessing key imperatives to make the business more sustainable is a boardroom priority today. CFOs are taking the lead in devising the sustainability strategy of organizations, designing models to link ESG priorities to operations, both in India and globally.

Building a compelling employer brand: Today, there is a need to create an intentional organizational culture that is truly interlinked with the long-term vision of the company. CFOs can leverage their financial expertise and familiarity with the company’s business objectives and align these imperatives with the employer branding strategy. Building a strong employer brand is the main driver for employee acquisition, productivity, and retention. A CFO can bring these elements together, while also leveraging analytical capabilities to optimize HR metrics for human capital decisions.

Economies and markets will continue to grow, and roles will continue to evolve. The importance of risk management, consumer safety, and well-being will increase. Understanding how our customers' expectations and needs are changing will help insurers develop better products and enhance customer interactions. Hence, the CFO will continue to serve as a strategic advisor particularly when it comes to handling highly turbulent markets and macroeconomic conditions, while also leading change and transformation so that the organisation can adapt for the future.