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Think of Accounting Systems As Hub for Information Wheel

Bob Mueller June 2007

Accounting systems may seem about as exciting as dry toast, but they're becoming increasingly important hubs in insurance carriers' IT strategies.

On the back end, they serve as collection points by integrating data from billing, HR, investment management and even policy administration systems. On the front end, either alone or in combination with other products, they feed information into data warehouses and management dashboards to provide detailed and flexible reports that give managers new ways of seeing their companies' workings.

Users are becoming more demanding of the reports they get from their accounting systems, says Donald Light, a senior analyst with Boston-based Celent LLC and author of a 2006 report on insurance accounting vendors.

"There are really two levels of reports that are relevant," Light says. "One is reports for everyday users—the folks who make the accounting entries, do the closes at the end of the period and all that. Their job is much easier to the degree that they can have powerful and flexible ways of getting reports. The second type of report is management-and performance-oriented. We're seeing a lot more emphasis on that, as well. So, it's ease of use and making the information you have valuable and actionable."

The National Life Group in Montpelier, Vt., a diversified life, annuity and asset management company with $19.3 billion under management, replaced a 20-year-old mainframe accounting system with Lawson General Ledger last October. It did so primarily with a view to expanding its reporting capabilities and making it easier to track financial results. Two decades of growth and change also played into the decision, says David Sanguinetti, second vice president-financial planning and analysis.

The legacy system "had served us very well for a long time, but during that time our business had grown substantially," Sanguinetti recalls. "We'd added a whole new subsidiary, Life of the Southwest, in 1996. Our asset management operation had expanded significantly. We'd reorganized the Group into profit centers and changed the way we reported our internal results to support this new accountability."

Currently, National Life uses Business Objects' Crystal Reports to generate many of its reports and uses Lawson's Business Intelligence (LBI) suite, a front-end product that allows the carrier to centralize its reporting capabilities.

"At the simplest level," Sanguinetti says, "I can use LBI to set up a Web page for a particular part of the company-our profit centers, for example-and on that Web page I can put all the Crystal reports that they need." And, he adds, the integrity of the data in the reports is assured because it all comes from a consistent data source.

So far, only National Life's financial people are using those reporting capabilities, but Sanguinetti says he sees opportunities to expand into reports for other managers in the company. He singles out one Lawson tool, Smart Notifications, as having great potential. Smart Notifications monitors data sources, called infosets, and alerts users when the company meets predetermined thresholds.

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