Regulatory changes, ongoing economic challenges, lingering hardmarkets: these are some of the key situations that have convergedto create a challenging environment for CFOs charged with managingprofitable operations of insurers. While there is no easy solutionto these challenges, there are lessons that can be learned fromsuccessful strategies deployed across the industry. Sharing thatinsight is the focus of today’s CFO roundtable.

The CFO Roundtable has been a popular choice with financialexecutives since it was first introduced at the IASA conference.The five-session, day-long roundtable features insight fromeconomists, auditors, solution providers, and other specialists. Itwill cover topics of key concern to CFOs, including the growth ofanalytics, regulatory changes and convergence, and the use ofreinsurance strategies to achieve profitable growth.

“Our primary goal in assembling our roster of panelists andspeakers is to find people with deep knowledge, expertise, andexperience in issues that matter most to CFOs, and who also havethe ability to translate their experience into strategies andtactics that insurers can use,” says roundtable organizer MikeGraham, senior vice president of The Plateau Group.

The roundtable begins with a session led by Donald Ratajczak,PhD, emeritus professor at the J. Mack Robinson College of Businessat Georgia State University and a consulting economist forbusinesses and governmental agencies. Called the nation’s “topeconomic guru” by BusinessWeek magazine, Ratajczak is arecipient of the Blue Chip award for forecasting accuracy. Hissession, titled “Insurance Industry Economic Outlook: What’s Nextand How Does it Affect CFOs?” will present predictions of futureeconomic conditions, financial markets, government debt, and otherareas, exploring their likely impact on the insurance sector.

The ongoing economic crisis has created an environment offinancial uncertainty and regulatory change. In this environment,failure to consider information about potential shifts in premiumrevenue caused by both the economy and insurance market conditionscan significantly impact an insurer’s pricing, premium growthstrategies and profits—making accurate information and trendforecasts areas of critical importance to CFOs.

Effective Analytics

The second morning session will feature a panel discussion onanalytics, called “Overcoming ‘Operator Error’: Best Practices forPutting Analytics to Work.” The session focuses on the ways toimplement or enhance the use of analytics within an insuranceorganization.

“The term ‘operator error’ relates to the fact that insurersdon’t have a shortage of tools but, rather, a shortage of expertiseon how to use them,” Graham says. “We are going to look at howorganizations can extract, analyze, and use data effectively withcurrently available solutions: how can you really make analyticswork for your company, and what are the real benefits companies aregaining today?”

The session features several specialists in the analytics field.Moderating is Bill Freitag, CEO and managing partner, AgileTechnologies. Panel members include Craig Bedell, worldwideindustry executive - insurance business analytics, IBM, and AjayBhargava, director - analytics, Tata Consultancy Services.

Graham points out that analytics have never been more importantto insurers than in today’s current economic climate. “Analyticsare playing a crucial role in helping companies create and executeon critical business strategies,” he says.

The theme of analytics continues in the luncheon program, alsoled by Bedell. The luncheon session will look beyond the roleanalytics plays in today’s business of insurance and provideexamples of where leading-edge analytics are now focused, includingpredictive analytics.

Insurers are using predictive analytics to operate better atboth the strategic and tactical level. Strategically,analytics are essential to the highly tiered rating structures usedby leading carriers today. Tactically, analytics can supplement theyears of experience and knowledge of expert staff by usingalgorithms to determine future account performance, claimsoutcomes, and more.

Regulations and Reinsurance

Afternoon sessions focus on regulatory and reinsurance issues.The first afternoon session, “Audit and Regulatory Revelations:Keeping Pace with the Issues,” highlights the rapid pace of changein accounting and audit issues that challenge insurance-industryCFOs. Speakers include three partners from Johnson Lambert &Co. LLP: Gary Bowers, CPA; Bradley Diercx, CPA; and James Murphy,CPA.

The audit session targets a wide range of topics—issues andinitiatives in front of the NAIC, FASB’s financial instrumentsexposure draft, and more. “What challenges most CFOs is the largenumber of accounting pronouncements that are coming along,seemingly on a daily basis,” Graham says. “Issues around FASB/IASBconvergence, new tax developments, and other areas highlight what astate of flux the regulatory environment is in.”

The Johnson Lambert panel will examine steps some carriers havealready taken to get ahead of audit changes. It will also provideinsight into the areas that will most significantly impactstatutory accounting. “We hope to cover the key issues that are ofprimary importance to insurers today, as well as to take a lookinto both the near- and long-term future of regulatory reform,”Graham says.

The final session of the day deals with strategic uses ofreinsurance and is led by Bill Kennedy, Guy Carpenter’s CFA, CEO ofAnalytics, Capital Markets, Specialty Practices and Advisory.Kennedy will examine the current catastrophes—from the tsunami inJapan to tornadoes in the U.S.—and their impact on the reinsurancemarket; however, the majority of the session will look at how touse reinsurance to finance profitable growth.

Although insurers continue to explore new markets, undertakemergers, acquisitions, and strategic alliances, and createinnovative products to spur growth, capital modeling andproperly-structured reinsurance solutions are necessary to achieveoptimal results in today’s environment.

“Despite the number of catastrophic weather events, insurers’balance sheets are in a strong surplus position,” Graham says.“This is impacting their return on equity. Using reinsurance is away to use excess capital to create positive growth.”

The opportunity to gain knowledge from industry financialprofessionals “in the trenches” makes this session a must-attendopportunity for busy insurance execs. “The CFO Roundtable is aone-stop shop to explore issues of key importance to today’sinsurance CFOs,” Graham says.