The Future of Accounting Automation in the Insurance Industry

Attention accountants. Just because you have an affinity towards numbers, you breezed through all your accounting classes and your books are always perfectly balanced, does not mean that your days of learning and adapting are over. In fact, for accountants to succeed currently, they are going to need to bring a bit more to the table than just an appetite.

In a recent eBook by Flexi Software on accounting automation in the insurance industry, the desire to hire more well-rounded and future-ready accountants appears to be on everyone’s radar to a certain extent. This does not necessarily mean automating everything and doing away with accountants or hiring fewer accountants. What it does mean is hiring accountants who are armed with more than just an ability to maintain the books. Accounting and finance leaders now need an accountancy that is fluid in nature, robust in skillsets and agile enough to scale

With no thanks to the pandemic, but certainly acknowledging its impact, we all have been forced to adapt to new ways of working, learning, and living. In turn, this historic and catastrophic event has also propelled the accounting profession towards unprecedented opportunities for accountants to becoming more of a valued change agent and strategic consultant and less of the antiquated notion of what an accountant “used” to be. Let’s be clear though – the accounting profession was already undergoing a digital transformation. The pandemic merely accelerated the timeline.  

However, with these opportunities come some unique and very real challenges; some of which have been swirling around the profession for decades, while others have only just recently bubbled up to the surface. Case in point: accounting automation. The reality is that technology is undoubtedly driving change in accountancy practices, and accounting automation is leading the charge. For example, consider Robotic Process Automation, or RPA. According to research firm Gartner, RPA could save finance teams 25,000 hours of avoidable rework from human errors, at a cost savings of $878,000.


The challenges for those at the forefront, though, are numerous and, in some cases steep, if not daunting.

As the Flexi eBook revealed, the increased productivity, as well as the time-saving aspect of automation, are just two of the main benefits of adopting some type of automation into the accounting mix. However, getting “there” still appears to be a primary challenge for a lot of organizations, particularly in the insurance industry. From deciding what accounting software should be employed, to determining what manual processes need to be, or can be, automated, none of these decisions happens in a vacuum. In fact, a 2020 global survey of business leaders from a fairly wide swath of industries conducted by McKinsey found that nearly 66% of respondents were piloting solutions to automate at least one business process, which was up nearly 10% from two years earlier. The bottom line was more companies were pursuing automation initiatives year over year.

However, there are still quite a few companies who are currently struggling with not only the destination aspect of automation, but also the journey itself. A lot of companies know exactly what they want to automate but finding the right technology partner who understands exactly what is needed for their organization can be somewhat challenging. Conversely, a lot of companies are ripe for automation but have no idea how to begin, and therefore will just continue to put it off until sometime in the future when the “timing is right.” Thus, the percentage of companies that have fully automated at least one function from the McKinsey survey is not as great as one might assume. It has grown more modestly, from 29% in 2018 to 31% in 2020.

In addition, a lack of accounting automation is now also impacting a company’s ability to attract and retain talent. As such, finance and accounting leaders, particularly in the insurance industry, are not only stuck with a current workforce who are fearful of losing their jobs to automation, but also challenged with hiring a future workforce that expects to have certain aspects of their job automated. A Catch-22 for sure. Factor in the desire to hire people who have more of a diverse skillset that is geared more towards an analytical and forward thinking nature, and not just bookkeeping, and the challenge becomes more real and pressing by the day.

The new world reality is this: tech-comfortable accountants that are capable of confidently making strategic decisions that can make or save a company a lot of money can now pick and choose where and who they want to work for.

As all the participants in the Flexi eBook have revealed to various degrees, prioritizing automation offers many different shades of the same color, and yet it is no less important for all of them in terms of working towards the same goal of enabling and achieving success, as hiring top-flight talent. If anything, successful organizations in the insurance space continue to focus on training-up current accounting staffs, as well as trying to hire the best and the brightest. In addition, the focus on newer technologies is not abating anytime soon either. Introducing new ways of empowering and leveraging those staffs to work alongside new technologies is critical to current and future success as well.

In closing, a common thread across all respondents in the Flexi eBook was that accounting automation was indeed a strategic priority. However, the renewed focus on hiring and developing people that can bring a diverse set of skills to the accounting function appears to be just as critical to the success of the organization, as does technologies such as AI, machine learning and, of course, automation. If companies can factor in developing an operating model that enables scaling, along with balancing the intense pressure to meet stakeholder expectations, enjoying a competitive advantage for years to come will no longer be a pipedream.

The Top Challenges for Accountants in Insurance Part I

In part 1 of our ongoing Flexi Education Series, we sit down and talk to Schuyler Ryan CPA, AIAF – Assistant Vice President, Finance at Union Mutual

Marc Meyer: Hi Schuyler thanks for jumping on a quick call to talk about all-things insurance and accounting. You ready to do this?

Schuyler Ryan: I am!

MM: What do you see as the top accounting challenge(s) for insurance companies?

SR: One of the challenges we face in the Accounting field is being stuck in the past which hinders us from looking toward the future. To some extent, this will never change as we cannot report financials on a period before the period ends. Our role as accountants is often looking in the rearview mirror.

As an example, while the calendar year changes, the accounting department does not turn the calendar until late in the first quarter. For the insurance industry, this is largely due to the annual statement filing deadline of March 1st and continued prior year related filings through June 1st. 

MM: Is this feeling that you are “stuck in the past” more of an accounting problem, or is it a process problem?

SR:  I would say it is a mix. The accounting part of it is just the nature of our role. You cannot report on a period until it is closed, for example you cannot report on 12/31 financials until 1/1 because you have to close all of that activity. But there is also a process piece to it.

MM: Can it be “fixed?”

SR:  There is certainly the opportunity to streamline our processes to close a financial period and complete required reporting more efficiently. By completing the close process sooner, we would have the opportunity to move on to the next period sooner. If we can move on to the next period sooner and have more real time information available, we would be better business partners to the rest of the Company.  

MM: From a process standpoint, are there ways to speed that up?

SR: Yes, for us, we work on trying to get our entries in by the 5th business day after the close of the month. This has been an improvement for us – just a couple of years ago this was a real struggle. However, we continue to work toward improved efficiency in our processes for financial closing and reporting.

One example where Flexi has helped us to implement process efficiencies is in the realm of invoice processing and accruing for invoices at period-end. Once invoices are entered in the system, they’re automatically being accrued in our financials without having to do a manual entry.

MM: That is a great lead-in to my next question. Because of the proliferation of new tools and technologies, is it safe to say that your job is getting easier?

SR: I would say new tools and technologies make some of the more run of the mill bookkeeping tasks easier and more efficient. Overall, as referenced previously, we’ve seen a lot of improvement particularly in some more of the basic areas like creating journal entries and entering/processing invoices.

The automated workflow within Flexi for invoice processing and approvals is a time saver as is the ability to copy and paste journal entries. However, there are still complex accounting processes that require the skills of an Accountant. Being able to streamline some of the more basic tasks have helped to free up members of the team to take on more complex tasks that help them to develop and grow professionally.

MM: There could never be too much automation, could there be?

SR: In general, I would say no. But it must be careful automation. You do not want to automate a process that has so many nuances that you end up spending more time correcting automation (that’s done incorrectly) than if you had just done it manually. The goal is to automate things in a way that is effective.

We’re not able to automate everything and I think it’s because of all those nuances, but if you can get it to a good place then I don’t think there can be too much automation if it’s working effectively.

MM: You talked earlier about your staff and how you want them to employ more critical thinking and problem-solving skills. From your standpoint, are they embracing that mindset?

SR: I am incredibly proud of how our accounting department has embraced this growth mindset. I really want people who are visionaries, who are innovative, and who are thinking about things like, “How can we streamline this process?  How can we help the company be the best that it can be?”

This has shifted over recent years and actually points back to an earlier interview on accounting automation that you did with Spencer Kuo in which he talked about that “bookkeeper mentality.” That mentality is gone. Accountants are no longer just “bean counters” anymore. We really need to be analytical and help the larger organization to make strategic decisions.

That transition of the person who wants to do the bookkeeping to someone who needs to be a problem solver is important. It’s critical to have a finance team full of critical thinkers and individuals who can embrace change and innovation.

MM: Do you think we are at the crossroads when it comes to the role of the accountant? When you interview new job candidates, do they know that is what you’re looking for? Do they realize the expectations in accounting have changed?

SR: That is a good question. I do think we are at the crossroads and we do need to make that shift. In terms of interviewing candidates, I am looking for someone who is a critical thinker, a problem solver, and who is not content with doing the same thing every day.

When you have these interviews and meet candidates, you can get a sense from people when you simply ask them, “What made you get into accounting?” Do they want to manage debits and credits, or do they want to think through and solve problems? There is a definite difference.

MM: That is an interesting question to ask because I would not even know what a typical response would be. But I guess it is safe to say that everyone gets in it for different reasons.

SR: When I first started in accounting, my thinking was, “I like the concept of everything balancing,” and that makes/made sense to me because accounting was very black and white. But now, it has really shifted to the fact that I feel like I am doing a different thing every day, I am forecasting, and I’m really thinking about how different decisions will impact the financials. So, my perspective has shifted for me throughout my career as I have learned that it is not so black and white after all.

MM: So, today’s accountant needs to be more well-rounded? Skilled?

SR: Skilled is a good way of phrasing it. Simply put, people must be smart. You cannot do this job by just following step-by-step instructions. I look for people who I know are going to be smart and who can think critically about the task at hand. I like members of the team to have diverse skills and backgrounds because they can challenge and encourage each other by offering different perspectives.

MM: Is it hard to find talent these days?

SR: Yes, it certainly can be. It is not as easy as you might think. Often, people see a job opening for an accountant and they think bookkeeper but that is not what I am looking for. There are more simplistic roles that are suitable for someone who fits into that role, so I don’t mean to discredit that. It is just that, for our team – in corporate accounting for insurance, for example – I am looking for someone who has a different skill set- analytical and forward-thinking.

MM: So, the notion of automation taking everyone’s jobs is not exactly happening anytime soon?

SR: No. 😊

MM: We are almost done. This has been great, by the way. So, challenge wise, what happens in the industry in five to ten years? Are we poised for a technical tsunami in which AI and automation just turn the industry upside down?

SR: When you say industry, are you speaking of Insurance or Accounting?

MM: Let’s make it a two-fold question then. Let’s talk first about accounting and then how accounting is affecting insurance.

SR: Got it. As far as AI and Automation, I do think they are both going to continue to shape the accounting field and again, it redefines the type of person you want to hire. Regarding what it means to the overall finance and accounting departments, if you can automate some of the more basic functions, we’re still going to have people working in accounting. It is just going to be different in terms of the problems we’re solving and the goals we’re trying to achieve.

In terms of insurance, it is probably not much different from other industries from an accounting perspective. But the insurance industry, as a whole, is seeing so much change in terms of automation and AI. When technology moves throughout the company it sort of pulls accounting along. So, when we’re automating other areas, it gets you thinking about how you can make these improvements in other departments. Accounting is no exception there.

MM: What’s on your wish list that could make your job easier?

SR: One of the reasons we implemented Flexi was to try and reduce our reliance on excel in our processes. I would like to see us continue to explore the capabilities of Flexi and optimizing it to reduce our reliance on Excel and improve our overall financial reporting structure. Any way that we can automate things that tend to be repetitive and that aren’t worth the brainpower of our team, I’m all for it.

MM: Schuyler, believe it or not, we are done! That went super quick. Thank you so much for your time. Have a great rest of your week!

SR: Thank you- you’re welcome!

The Top Challenges for Accountants in Insurance Part III

In Part III of our ongoing Flexi Education Series, we sit down and talk to Natalie Roberts Vice President – Accounting, Controller from Medical Mutual

Marc Meyer: Hi Natalie. Thanks for jumping on and agreeing to do this interview.

Natalie Roberts: No problem.

MM: Natalie, let’s just get right to it. What do you see as the top accounting challenge(s) for insurance companies?

NR: For us, our biggest accounting challenge is automation and remote working capabilities. The challenge really is all about getting it going or started. Broadly speaking, I look at the challenges in our industry not necessarily from a personal perspective but more from a broader picture. Automation is not only an accounting challenge but also one for the software vendors.

For example, over the last 12 months, the challenge was a little different. Our true challenge revolved around trying to figure out solutions for working from home. The primary reason was that we had certain people that absolutely had to come into the office to mail invoices, for example. Because of that experience, this year one of our corporate goals is to eliminate as many instances as possible that require someone to actually be “in the office.”

MM: That’s an interesting transformation, do you view that as more of a technology issue or a process issue?

NR: Both. It’s about our policy administration system, specifically the billing part which we have an in-house system for. Stepping back, we also realized that we had other issues (with both systems and processes) that we had to solve to enable our teams to work from home. COVID was the start of it, but we were already starting to think of all these other types of situations that might prevent us from being in the office. We had to solve for all of them.

MM: What about on-prem vs. cloud technology. Did that come into play for you at all?

NR: Well one of the biggest things we had just achieved was getting the general ledger and AP processing into the cloud. The timing of that could not have been better. If we had not have moved these processes to the cloud when we did, working from home during the pandemic would not have been possible.

MM: Let’s talk more about the challenges that you are facing and I’m not referring just to Flexi, but is the challenge based on the tools, systems and software that you are using?

NR: The challenge is really just finding a solution to our problem, and asking, “Is there a vendor that can do that?” For us, for example, getting AR invoices printed and mailed when working remotely was a big deal. Also, we print thousands of checks. There was no way that someone was going to print thousands of checks from home. So, because of the last 12 months, the incorporation of OCR technologies into workflow processing of Accounts Payable was a big transformation for us.

MM: So, the pandemic created a problem that you didn’t have before. Which was, working from home 24/7?

NR: Right, simply put, the availability of multiple means of paying invoices (and vendors) other than paper checks became the primary issue. Getting AR invoices printed and mailed when working remotely was the challenge. Factor in that “live” signatures were needed on the checks…we had to work that out as well.

MM: Sounds to me that the more processes that you could automate today, the better? That would be a welcome thing for you right?

NR: Absolutely. I’m all about making things more efficient.

MM: Are there manual processes that you do on a day-to-day basis that you would like to get off of your plate?

NR: Me personally? Not so much. My staff? Definitely. Take for example bank reconciliations and matching. There’s no reason why someone should be sitting there manually matching the general ledger activity back to the bank statement.

MM: I’m curious, Have newer technologies and data security issues affected your world? Like most of us, I imagine the insurance industry is no stranger to existential threats.

NR: We are very aware too. Our Board is very aware, we have a security governance committee that meets regularly. In addition, we do quarterly training as well as constant phishing-prevention campaigns. This security awareness is something that is constantly being discussed in our company.

MM: I get it. It’s crazy what we have to do these days on behalf of security. Let me ask you, Is the future of accounting in insurance bright? What do you predict for the future? What’s on your wish list?

NR: The biggest thing on my wish list is the OCR for AP. That’s probably the biggest, although another corporate goal for this year is to improve our database and query capabilities to help with financial analysis (primarily related to policy and claims data).

MM: Can you see a time where AI factors into what you currently do on a day-to-day basis?

NR: Absolutely and I think that works hand-in-hand with OCR capabilities: the invoice is read and the AI technology helps to determine what account it gets charged to. The insurance industry has traditionally been a laggard when it comes to adopting new technologies. But I see AI on the horizon.

MM: You’ve seen the evolution.

NR: It is something I’ve dealt with my whole career. I have been that person at the forefront trying to push to get new technology into the mix.

MM: That’s really cool to hear. Every company needs that champion of technology to drive transformational change. Natalie, I want to thank you for taking the time to sit down and talk with me today. I really appreciate it.

NR: My pleasure.

The Top Challenges for Insurance Accountants Part II

In Part II of our ongoing Flexi Education Series, we sit down and talk to Michelle Lucero, Senior Accountant at New Mexico Mutual

Marc Meyer: Hi Michelle, thanks for taking the time to talk all things insurance and accounting, I really appreciate it.

Michelle Lucero: No problem

MM: How long have you been working at New Mexico Mutual?

ML: About 4.5 years.

MM: What’s one of your main challenges?

ML: Right now, my main challenge is that I do everything! We do not have a single focus such as AP or AR. We do it all.

We have ten companies, and we are responsible for the full close cycle of those companies, from beginning to end every month, quarter, and annual closing. Each of our accountants is responsible for at least two companies, sometimes up to four.

So, it is easy to say what our biggest challenge is, not just for me and my team but for the insurance industry as a whole and probably many industries. It is moving away from all the manual work and finding ways to automate our accounting!

MM: Would you say you are at the crossroads of manual processes and automation?

ML: Actually, we are at the very beginning. We are in talks now of how we can do it. With 150 employees, we are still a relatively small company. So unlike large companies that can more quickly “just do it,” we are at the beginning of discussions: what it looks like, how it can work for us, and how to implement.

MM: What about on a day-to-day level. What keeps you in the weeds? What are those things that come up every day that you cannot escape?

ML: Definitely manual processes, especially recons. I handle all of our bank account reconciliations, and everything is manual. As any accountant knows, reconciliations are extremely time consuming. With no automation behind it, it can be a very tedious process, like “copy the GL, paste it in here, and then manually compare your expenses against your bank data.

In addition to our big accounts, I also do all the benefit reconciliations too. And it’s pretty much the same process, including all the manual work.

MM: A couple of years ago I did some consulting work with a company in the RPA space. The ongoing concern or belief at the time was that RPA was going to eliminate jobs, but in your case, it sounds like automation would be a good thing for your company. Do you feel that way?

ML: I do. I agree with that. RPA and automation will provide opportunities for data analysis and enable us to actually look at the big picture. Right now, we can’t do that because we’re so busy looking at the small picture and the details of the constant manual work, we don’t have the time to look beyond that.

If anything, I think the bigger problem is that people are automated (robotic) in their thinking. When our thoughts are, “this is what I’ve got to do and this is why I’ve got to do it and this is when it’s got to be done,” there is nobody looking at the bigger things that matter more. So yes, there are a lot of opportunities for automation, not just in our processes but also changing mindsets.

MM: Ok, let’s talk more about the challenges. We discussed how adopting automation is a challenge for your company and probably many others. Are there any other (challenges) you face, for example, trying to juggle ten different companies? Is it trying to automate processes across the board?

ML: I think the challenges are one in the same. It’s the automation part for sure. But, because we have ten companies, our largeness mitigates a lot of problems that we might have.

One thing to keep in mind is that because we have ten companies, there is a lot of repetition in our accounting. We’re doing the same thing but for a different company, over and over again. It’s the same reports, just different numbers. Thus, if we had automation in place it would help exponentially. We could apply those time savings across all our companies!

MM: Interesting. So, after all is said and done, it does come down to automation as the main challenge. That’s awesome that you can identify it without doubt, or at least it is if you are going to do something about it.

ML: Right. But I also think the challenge of automation is that it deters other employees from wanting to learn the job. They don’t want to get down in the weeds and perform all this manual work.

For example, I’m going to be on maternity leave soon, so I am trying to teach somebody else the job and she doesn’t want to have anything to do with it because of the manual part of it. It scares her.

This is one of the hidden problems associated with NOT automating and continuing to do manual work. It can become a problem for companies in attracting new talent, especially with a younger generation and potential employees who are looking at a business as “all manual.”

MM: Chicken or the egg, right? Ok, so you got two questions left and you’re doing great! So, in your four years there, how have newer technologies and data security affected your world? What has changed from day one to now for you?

ML: Our reporting software. We used to use this really, old school software but that has changed for the better. That was a big change because it allowed us to reduce our manual work. Also moving to cloud-based services, like I know Flexi has one and we plan on utilizing that later this year when I get back from my leave. From a security standpoint, moving to cloud-based services is a great thing. It also allows our IT department to focus on other security issues.

MM: You know it’s interesting to see how cloud computing is rolling in like a fog into the accounting industry but there are still some on-prem hold-outs out there. But in the end, the cloud is the way to go. It’s pretty evident right?

ML: Yes, it frees up a lot of our servers and we spend a lot of money on servers. It’s even affected our AP function – we no longer use paper. Nobody is turning in paper anymore. Within my four years that’s been a big change. For example, I sit next to the AP Clerk and I used to see stacks of check requests but now we’re using Flexi Workflow and now everything is more automated and more organized, with much less room for error. It all really helps and that’s another automation perk that’s really beneficial.

MM: What’s on your wish list? What are you looking forward to when you come back from maternity leave?

ML: Ironically, I just got promoted last week and my boss mentioned that she wants me to drive the automation push. So, my first thing I want to do when I come back is move to Flexi’s cloud accounting software. That will be my first project.

After that, I want to work with our BA team so that we can look at where do we begin with the automation of our reports and possibly working with Flexi to see if we can do some type of accounting automation with our monthly entries. So those are my two biggies when I get back.

MM: How do you feel about AI?

ML: I’d welcome it, but I think we’re years away. Though I do think AI in accounting is applicable, or will be. You were talking about fraud earlier, I think that given that people are so in the weeds with work it’s easy for things to get overlooked or for people to game the system. So I think AI would be helpful in recognizing fraud. It would also again, allow people to focus on other things. So, it’s not taking jobs away but rather expanding knowledge and expanding the job.

MM: Two minutes left. What do you love about your job?

ML: My manager and my department. They are wonderful. Like, they’re awesome. I have a great team, great manager and great co-workers. I love that I’m given the opportunity to look for other ways of becoming more efficient and/or change things. They’re always open to new ideas. I love that I’m able to learn everything, it’s not just one section, my knowledge base increases constantly.

MM: You’ve been working from home since Covid hit?

ML: Yes and honestly, working from home has increased my productivity and my focus; no distractions. In fact, I’m amazed what I’ve done from home in a year versus what I could have done in the office.

MM: Michelle, we are done. I want to thank you for your time, your answers were awesome. Good luck on maternity leave and we will talk to you soon. Thank you so much.

ML: Thank you!

Are Robots Posed to Take Accounting Jobs?

Are robots posed to take accounting jobs? No, not exactly. But kind of.

Science fiction would have you believe that the human race is on track to be replaced by robots in the near future, but while advances in technology are increasing artificial intelligence (AI) and automation, the likelihood of robotic replacement is slim.

There are plenty of instances where a human touch is preferred. Not everything can be outsourced to machines. A study cited by found that 68 percent of clients surveyed prefer having access to a human financial advisor rather than a simple technology solution.

That’s a relief for accountants, but it’s important to note that this is also dependent on the task being performed. As a common example, many of us use software that is widely available (and sometimes free) to file our taxes over visiting a tax consultant, so your mileage may vary when it comes to what you’re willing to leave to the machines.

It is true that much of the manual work traditionally completed by accountants can now be automated. This means that accounting firms can save money by employing fewer people, increase accuracy by eliminating opportunities for manual error, and shift their focus to providing strategic and advisory services, which is in increasingly high demand.

But as for technical accountants who work in niche industries or delve deep into regulations and compliance? Robots aren’t likely to replace them.

Relevancy is key

Being irrelevant in your field is the kiss of death. If the threat of AI and automation is looming, focus on expanding your skillset and breadth of knowledge. By embracing technology, you can provide advisory services to clients to help them choose the software that’s right for them. If you’re not neck-deep in a spreadsheet hunting for the one equation that is causing your error, then you have lots of time back on the clock to truly refine your skills and become a subject matter expert in your field. This provides value to your clients and gives you a competitive edge.

AI is getting smarter–not just automating anymore, but learning and drawing conclusions. Your best bet is to embrace it for the tool it is. Let it do its job while you focus on yours.


Implementing cloud-based accounting software is your first step to embracing AI, automation, and the robots of the future.Learn more about partnering with Flexi today. Call 800-353-9492.