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Phinsys

Phinsys: Overcoming the challenges of financial reporting

Phinsys has built software to optimise and automate the financial accounting, regulatory reporting and analytical processes within insurance businesses. The company works with a wide range of organisations across the UK, Europe, US, Bermuda and the Lloyd’s insurance market. InsTech’s Ali Smedley caught up with Richard Tyler and Stuart Conibear to discuss why Phinsys was founded, what “data warehousing” is and the financial reporting challenges the insurance industry faces.

 

Member Spotlight: Phinsys

Richard, Stuart – what do both of your roles at Phinsys involve?

SC: I am Phinsys’ Chief Commercial Officer. Based in London, I oversee our UK projects and relationships. I work with our clients from prospecting to delivering the solution and onwards. My role primarily covers sales, marketing and contracting.

RT: I am the founder and CEO at Phinsys. I focus on the company’s geographic growth strategy and product development – at the moment I am heading up the development of the next version of our software. I also review future roadmap opportunities that we want to bring to market, including which companies to partner with.

Richard, why did you found the company?

RT: Before founding Phinsys, I worked as the Head of Financial Reporting and Systems at insurers Chubb and then ACE, which merged with Chubb in 2015. During this time I realised that many insurers, brokers and MGAs were lacking an effective financial reporting system, leading to time-consuming manual processes. I founded Phinsys to provide a solution that brings together relevant data and applies rules against that data to produce a company’s earnings, IBNR (Incurred But Not Reported) calculations and expense allocations. Since then, our products have expanded so that today, the Phinsys platform provides additional automation capabilities for the financial close, statutory and regulatory reporting functions.

What does Phinsys offer to insurers, brokers and MGAs?

RT: Phinsys’ software processes and runs calculation engines against a company’s data to produce information for internal management and financial accounting. We have developed a standardised, web-based platform that works across all markets and enables us to deliver a common framework to all our clients. This platform can then be configured for each of our clients, enabling us to create tailored solutions for brokers, insurers, ILS funds and MGAs. Phinsys’ team has strong expertise within insurance, finance and technology which allows us to partner with clients to build and integrate our financial software solution to meet their specific needs.

SC: Phinsys installs the software solution on a client’s hardware infrastructure or within the cloud. We extract data from all their source systems, process it and then send it into their general ledger systems. The platform provides a single source for all financial data and maintains the data lineage of all transactions, including any transformations the data underwent along the way. This enables companies to have confidence in the quality and integrity of their data and maintain effective data governance for SOX compliance.

Phinsys creates “data warehouses” for clients. What does this mean?

RT: Data warehousing refers to the process of collating data from multiple sources and conforming it into a single, efficient reporting structure. Our customers will have many different systems that contain premium, claims, expenses and investment income data. Data warehousing allows them to report on all of this data in one place to see their businesses’ entire profitability and performance.

SC: Different people within an organisation will have different interests in financial information. For example, finance teams want to understand the data at the current point in time while actuarial teams want to understand how it has changed over time to be able to model future risk performance. Data warehousing allows financial information to be easily explored in this way and is an important component for analytics and data science initiatives.

How does Phinsys ingest data from a range of sources?

RT: Phinsys has built various capabilities for ingesting data. The first step is to ensure that we have links to all of a client’s relevant data sources. We can pull in information directly from any kind of database or API. Our proprietary ingestion tools can also bring in data from Excel, CSV, XML and JSON files, for example. Phinsys is then able to process all of this data in one place.

What is the biggest reporting challenge the insurance industry is currently facing?

RT: Insurance companies tend to focus on current regulatory requirements, but there is always going to be regulatory change down the line. If companies focus on getting their data organised first, reporting processes can be much easier. When data is collated and processed in one location and at a granular level, implementing new regulatory requirements is easier, including more complex rule changes.

SC: At Phinsys we have found that with each new reporting requirement, whether that be the Solvency II regime or IFRS 17, we have had to make very few changes to our core offering. Our solution can easily adapt to these new requirements as we work closely with our clients to ensure we have their data captured at the right granularity to begin with.

What companies does Phinsys partner with?

SC: Over the last 12 years we have operated quite self-sufficiently. However, as we continue to expand in scale and geography we are increasingly looking to partner with other organisations to enable us to deliver larger and more global projects, as well as offer complementary solutions as part of a broader ecosystem of tech partners. We recently partnered with a large global broker management systems provider. Our software will enable their new and existing clients to automate financial reporting and accounting processes. Over 2023 we will be announcing more strategic partnerships.

RT: The Phinsys team typically has a range of specific finance, insurance and IT skills that are necessary for working with our clients to deliver our projects. For activities that need only technology skills, we are beginning to look at scaling the business through partnerships with companies that can provide these specific skills that we need alongside our insurance and finance-specific skill sets.

How has Phinsys worked with insurers such as the Hamilton Insurance Group?

RT: We originally started working with Hamilton on its Lloyd’s syndicate. At the time it had also just acquired another syndicate from Pembroke. Initially, it had to collate data from two different policy administration systems into one combined system – once it had done this, we integrated our software for its UK business. After a successful implementation we further broadened our solution to cover all of its European and reinsurance business, before integrating its US business. Phinsys’ solution continues to grow as Hamilton expands. We aim to provide the company with one reporting layer to help it understand its financial performance across the entire Hamilton Group – regardless of where the business is being written and into which system it is being written into.

Why has Phinsys joined InsTech as a corporate member?

SC: InsTech offers a fantastic network of technology companies, insurers, brokers and consultants. The monthly live events are incredibly valuable for networking and learning about what is going on in the industry as well as what other companies are offering. The articles and reports that InsTech publishes are also a great source of knowledge.

What companies is Phinsys looking to connect with?

RT: We are interested in speaking to insurers, MGAs and brokers that could benefit from our platform. There are always opportunities to integrate with other companies, so we are interested in speaking with potential ecosystem partners.

SC: Financial transformations do not occur very often within organisations, usually every 5-10 years. It is a very complex area, so they need to ensure that they are working with a partner they can trust. Phinsys has successfully delivered many projects in the London market, but there are still more companies we’ve not had to opportunity to talk to. We would be interested in speaking to those companies that are looking to improve their finance function.

What should readers do if they want to learn more?

SC: If anyone would like to learn more about our solution or how to work with us, they should reach out to me or Eric Butler on LinkedIn or visit phinsys.com. Alternatively, email us at [email protected] or [email protected].