This blog was last updated on September 22, 2020
Tax filing, wherever you are in the world, is becoming increasingly complex, with regular rate updates and governments eager to close tax gaps via new mandates that demand real-time reporting.
Despite this, many captive insurers still rely on resource-heavy, manual procedures to capture, validate and process large volumes of data. As well as taking significant time, this approach also carries a greater risk of errors.
As Daniela Dinkova, compliance services supervisor of our captives practice, recently shared with Captive International, insurtech solutions are helping ease this burden by delivering automation to accelerate workflows and improve accuracy. A technology-enabled approach helps to simplify complex tax calculations based on the captive insurer’s specific products and the type of risk covered. They can also streamline the process of building insurance premium tax and parafiscal charges into premium allocations to protect profit margins.
Operating internationally
If a captive operates across multiple jurisdictions, all requiring different filing and reporting processes, the need for technology is even greater. To meet the complex and fragmented demands of each tax authority, in particular the need for ever-greater granular reporting, insurtech helps to provide and store the necessary data, not just for compliance but also to proactively improve efficiency.
Use cases include making insurance premium tax data easily accessible for auditing purposes and smooth reporting and filing.
Speed, accuracy and compliance
Understandably, some captives are reluctant to invest in technology that they may only use once a year when annual filing takes place. Others are concerned about whether digital solutions will be disruptive. The fact is, however, that spreadsheets don’t allow captives to move quickly in the face of complex, rapidly-changing government regulations and they also can’t deliver the level of data security required in today’s digital era.
If a full-scale implementation seems too daunting, captive insurers can work with consultants and benefit from their technology without having to invest the time and resource themselves. If organisations do want to improve data security, compliance, efficiency and filing accuracy, now could be the time to explore the wealth of technologies available.
Full article originally published here by Captive International.
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