LB Forsikring improved their budgetting

with CPM

Solvency rules make demands on the insurance industry for automated financial management processes. LB Forsikring is equipped with increased focus on financial management and a Prophix solution from Accobat, which, in addition to automating budgeting, also strengthens and simplifies scenario planning, sensitivity analysis, etc.

Do not hesitate at the laurels

Great placements in the annual membership satisfaction survey, strong results, nice premium growth and investment results speak its clear language. But the company is not resting on the laurels, and the strategy until 2018 is ready. The goal is to be the preferred member-owned insurance company in 2018, and increased police sales by 20%. The attitude towards digitization is equally clear: according to management's strategic roadmap for focus areas, LB Insurance will "have the best solutions".

Solvency rules govern the rules of the industry

The insurance industry is facing some Solvency rules that deal with the manual processes, such as LB Insurance - in the form of spreadsheets - previously based their budgeting. Management has therefore generally sharpened the company's focus on financial management, including, among other things, even sharper follow-up on the budget. It increased the need to manage the process even smarter, and make it even more agile. In addition, it was easier and faster to see the profitability of the individual products, based on three key accounting items: paid premiums, paid compensation and current costs.

"Earlier, we based on spreadsheets. But manual budget processes are at risk because the formulas can relatively easily break, "says Peter Nielsen, Senior Vice President, LB Insurance. He also points out that manual budgeting took a long time. But how could LB Insurance generally optimize financial management and get automated and streamlined budgeting? The answer found LB Insurance together with Accobat in the form of the Prophix budget and reporting tool.

"Accobat and Prophix have helped us to get a more structured approach and some rooted models that have automated our budget processes so that we are also at the forefront of this level of financial management - for example, demanding system support for financial management, "Says Peter Nielsen.

In addition, management at LB Forsikring sees it as a gain that the company has effectively eliminated the risk in the figures that spreadsheets create. "The desire to automate and structure the budget process was clearly one of the wishes when we joined Accobat - and Prophix simply creates greater security about the result."

The CFO also has no doubt that the efficiency of the budget process has been significantly increased, thanks to anchored templates that the insurance company has built in Prophix. The great advantage of having a standard solution is that you do the same every time you make budget. It strengthens both the speed and quality of the process, "he says.

Four business-critical cubes

LB Insurance has built four cubes in Prophix. Two of them show how the company's prizes and substitutes develop, the third is a capacity-building tool for budgeting on the employee side - and a fourth is a financial cube that gathers it all. The strength of our cubes is that they create consistency in the way we budget on, year after year. "

Easier to make a forecast for prizes and replacements

Prophix makes it easy to forecast the premiums by allowing LB Insurance to look forward to the future. They do this by means of the history of accounting items such as repetition, customer retirement and retirement etc.

"Prophix makes it possible to modulate these items - both on prizes and replacements - so we can use the past to tell something sensible about the expected future. Once the models have been built - which has required some resources - the benefits will be in terms of repeatability, resource savings and significant process optimization - both when we make regular budgets, rolling premium budgets, long-term budgets and capital planning, "says Peter Nielsen.

In addition to automated budget processes, LB Insurance has also facilitated payroll management with a payroll that can partly pay employee wage budgets, and partly, through a built-in salary scale, automatically ensure that employees on the DFL agreement are on the right step from some turnaround dates.

"In the past, we could only budget salary for the various departments. Today, a section director can see the most recently realized wages and pension rates via a single schedule, and from this he can adjust the salary up or down for the individual employee."

For a company like LB Insurance, which has both hourly and employee-related employees and non-contracted employees, it is important to have a payrolling tool tailored to the business. They've got it with Prophix.

"The salary module supports our different employee types, which creates both precision and planning overview because we have a continuous overview of who is rising in salary and how much they rise," says the CFO.

Scenario planning and sensitivity analysis

Prophix not only makes it easy for LB Forsto comply with the rules in the industry's annual budget plans - the solution also makes it possible to stress the requirements of the financial plan in the capital plan - which gives a valuable business insight.

Peter Nielsen explains: "The stress test makes it possible to see the consequences of a particular development, such as our injury rate and our average injury size, or increase in sales of policies. This business impression creates the significant business advantage that we can easily and efficiently See how different actions or fluctuations affect our results - and that we have access to data that makes it possible - and easy - to do scenario planning and sensitivity analyzes. "

Peter Nielsen has no doubt: "To such a degree, Prophix has structured and systematized our budgeting, forecasting and capital planning. And the powerful simulation capabilities in Prophix are vital to both our planning, our financial management, and our ability to realize the ambitious business strategy by 2018. "

About LB Insurance

LB Insurance is the story of a successful merger of Teacher's Fire Insurance, Bauta Insurance, Runa Insurance and FDM Insurance. The five companies passed in 2012 joined together in one member-owned insurance company, which primarily offers private non-life insurance. The company has 540 employees and headquarters in Copenhagen.