Only one in five actuaries and insurance finance professionals are confident of their firm’s data control processes, in particular the handling of spreadsheets, according research by ClusterSeven. Two in five respondents stated that controls around spreadsheet access could be improved and 13% said they are simply not confident at all about the oversight process behind spreadsheets.
According to the research, only 28% of people believe there is enough information for others to manage their spreadsheets in case of their absence. 19% went so far as to say that a qualified actuary would have to rebuild spreadsheets given a lack of basic continuity protocols.
The study highlights how exposed modern financial institutions are to data risks, as demands placed on their spreadsheet-based systems have expanded.
“A core thrust of the research was to calculate how exposed respondents felt they and their companies were to spreadsheet risks and the overall transparency and accessibility of their data management systems,” said Ralph Baxter, CEO of ClusterSeven.
“Actuaries hold the keys to excellence in data management and the spreadsheets that underpin data processes. Here, the survey indicated that people had real concerns about the inability of other qualified individuals to understand their company’s spreadsheets and the lack of standardisation of data management.”
The survey also found that 49% of respondents use spreadsheets more than any other software application for modeling, data management and reporting activities, including 9% that solely use spreadsheets for these activities. Only 16% of respondents said they either did not use spreadsheets at all, or used them less than other applications. This means that 84% of the insurance risk management analysis supporting pensions and policies are significantly or entirely dependent on spreadsheets.
Baxter added, “Overall one in five respondents rated spreadsheet risk very serious while a further 31% put it as fairly serious. This is a stark indication of just how important this issue has now become to the insurance profession.”
