The insurance industry is all about risk management. Insurance companies provide their insureds protection against risk, while simultaneously managing risk in their business. Not only do issues around underwriting, claims processing and payment require attention but so do other areas such as the integration of artificial intelligence and seismic changes ushered in through InsurTech. All of this is in addition to the backdrop of compliance concerns such as financial reporting, tax compliance, regulatory matters, and more.
To help manage these competing needs and priorities, insurance companies need to partner with experienced CPA firms that can guide them. Finding the right insurance CPA to assist can be challenging because many appear to offer the same services, with the same credentials and satisfying the same NAIC and regulatory needs. So, how does one find the right insurance CPA?
To assist in the process, look for a firm with the following:
- Depth of Knowledge – It’s essential to work with a firm with a broad depth of knowledge in insurance accounting. Insurance has its own jargon and when it comes to accounting its own particular “language” (Statutory Accounting Principles – SAP) which vary widely from traditional accounting standards. It’s important to work with a firm that can navigate the red tape possessing a depth of regulatory knowledge. Every state and jurisdiction possesses its own insurance code and regulations. Since the industry is so specialized, it’s also essential to work with a firm committed to the industry from top to bottom, left to right. That means a firm with expertise in all disciplines, accounting, tax, information technology, and a deep bench of knowledgeable professionals from staff to partner. Finding the right insurance CPA means finding a firm with specialized, technical knowledge across the org chart.
- Industry Involvement – It’s important for a CPA to be abreast of issues, challenges, and opportunities facing industry companies. The firm’s network of trade groups, associations, friends, and colleagues in the industry greatly enhance perspective. One way to evaluate a CPA is to assess their involvement with state and national insurance accounting and other associations. Participation in these organizations reflects a commitment to staying current on issues, technical changes, team development, and maintaining a presence in the industry. Finding the right insurance CPA means finding a firm that is actively involved in the industry.
- Healthy Clients – Finding a firm that has clients in a strong financial condition is often a reflection of “seasoned” advice and guidance. Given the seemingly endless news of natural disasters costing billions, it’s essential to partner with an insurance CPA who can help prepare for the unexpected. When evaluating potential providers, be sure to review their clients’ ratings with services such as A.M. Best and others. If ratings are not available, look for quality reporting and healthy results in financial statements and regulatory filings. Great companies and great CPAs find each other.
- Extensive Professional Network – Beyond the typical accounting matters at hand, most insurance companies need assistance with other areas of their business, including legal and human resources advice. Firms with deep insurance experience will have excellent networks within other industries that clients can access as part of their consulting offering. Often, these professionals work closely together and collaborate well on the clients’ behalf. Finding the right insurance CPA means finding a firm with an extensive professional network.