Perspectives

Tax transforms, business wins: An industry perspective

Enhancing the tax function makes an impact at leading insurance and health plans organizations

Global tax regulation is changing faster than ever for insurance and health plans companies. Industry consolidation, management of vast data stores, and systems integration all challenge Tax Executives to keep up. What can be done to gain competitive advantage and transform how Tax does business?

The call for tax department transformation

In our work with clients across industries and around the world, we see first-hand that CFOs and other stakeholders are asking tax executives to raise their game and proactively partner with the broader business. Increasingly, these leaders are looking for transformation of the tax function to add more value to the organization.

Indeed, pressure is mounting for tax departments in all industries to expand in scope and impact as their organizations grapple with increasing competition, globalization, and technologies in the midst of stricter and more aligned regulations. In addition to the traditional responsibilities of tax planning, reporting, and management, tax executives face urgent expectations to mitigate risk and lead decision-making across the organization.

Responding to the emerging demands involves a shift in how—not necessarily what—work is performed. It requires enhancement of tax responsibilities in line with overarching business strategies. Transformation can elevate the capabilities and performance of the tax department in ways that incremental change cannot. It can increase the tax department’s value to the organization by:

  • Enhancing operational efficiency—Freeing up personnel to perform value-added tax planning activities with increased compliance and reporting efficiency driven by technology and process standardization.
  • Improving risk management—Increasing transparency and formalizing risk procedures that can help effectively address financial statement and audit risk.
  • Increasing strategic and business alignment—Becoming a value-added tax function that is aligned with the organization’s strategies and partners closely with business units.

Deloitte has worked with a number of insurance and health plans organizations to gain perspective, plan for change, and start their tax department transformation journeys. Let’s take a closer look at the issues the tax departments of these companies face, and how they are heeding the call to transform.

Tax department transformation in insurance and health plans: Key issues and Deloitte Transformation Enablers

In our tax work with leading insurance and health plans companies, our clients note some key issues that are keeping them up at night:

  • Increased industry consolidation, challenges, and uncertainty related to health care reform
  • Integrating finance and tax technologies
  • Storing, maintaining, and utilizing the breadth of data that comes through the tax department, an insurance organization’s largest consumer of data—and managing the associated responsibility and risk
  • Understanding and complying with statutory and regulatory changes
  • Higher external and internal reporting requirements compromised by manually-intensive data gathering efforts
  • Organizational mandates for tax functions to do more with less

In response to these many drivers of change, insurance and health plans tax departments are looking for solutions that address their challenges in four key areas, which we call Deloitte Transformation Enablers:

  • People: Deploy people to more value-added activities.
  • Process, technology, and data: Make better use of their data by leveraging new technologies.
  • Operating model: Simplify processes and policies, streamline their operating models.
  • Risk and policy: Manage risk.

Using this framework, Deloitte helps clients critically analyze the need for transformation and create the necessary changes. Here are just two examples of how Deloitte is delivering value to insurance and health plans clients by tackling their complex issues and assisting them in the deployment of solutions:

Leading the future of the tax department

Overall, we see an increase in the number of insurance and health plans companies exploring tax department transformation—they are looking for more usable data, mitigated risk, and to redeploy people to focus on value-added activities.

Deloitte’s Tax Department Transformation practitioners help clients start with a solid plan, analyzing tax department performance, providing perspectives for the journey and an actionable roadmap for change.

For more information or to contact Deloitte, visit the tax transformation home page. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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