How SAP and Northern Trust Meet the Challenges of Financial Asset Management in the Insurance Industry

Over the last decade, digital transformation has empowered companies to create new business models, control costs, maintain compliance, and enhance customer loyalty. COVID-19 has accelerated this digital transformation journey, forcing companies to ask themselves, “Are our digital initiatives effective and have they been the right ones?”

For Northern Trust, the answer to this question is a resounding “yes,” thanks in part to the strong relationship the company has built with SAP to deliver innovative, scalable systems and business-driven content and services.

Northern Trust: Market-Leading Approach to Financial Asset Solutions for Insurance Companies

Named the “Best Custodian” by Private Equity Wire in 2020, Northern Trust serves more than 180 insurance clients worldwide with more than US$1 trillion in assets. The company has been providing financial management solutions to insurance companies for more than 90 years.

Seven years ago, Northern Trust identified the need for an outsourced investment accounting solution in the marketplace that was robust, scalable, and flexible. In the current low interest environment, insurance companies have had to be creative in how they trade and what they trade. Real-time insight across the entire portfolio is critical to business success. Yet Northern Trust’s clients were struggling to have all their assets on a single platform and instead relied on a patchwork of disparate solutions. Others were going through the process of bringing their derivatives in to see a consolidated view of their true holdings and were struggling to understand their accounting.

Northern Trust sought a cloud-based, agnostic platform that would allow clients to customize their ledgers, support every type of trading option, allow management of all asset classes from privates to derivatives, and accurately represent their position. The right digital solution would need to solve the challenges caused by extracting accounting data, working with data across the globe, and integrating multiple data platforms – all while providing data in real-time.

SAP Financial Asset Management works to meet these needs and more, providing a one-of-a-kind investment accounting and analytics services application that marries technology and service. Northern Trust considers the application to be the ironclad calculation engine for everything that happens for its clients’ portfolios. By adding the cloud-based engine for investment accounting and analytics, this gives Northern Trust’s clients the ability to truly “interrogate their data” rather than cobbling together Excel files and PDF files.

SAP and Northern Trust: Innovation for Insurance Accounting and Analytics

Northern Trust started as an SAP customer, operating SAP Financial Asset Management for more than five years before expanding the relationship to help innovate its current business model. Together, the companies work to provide both the market-leading investment accounting platform and robust services. SAP provides the sustainable, scalable application; Northern Trust’s Investment Accounting & Analytics Service operates on top of SAP Financial Asset Management, providing functional, business-driven content and services to joint customers. It’s a unique relationship that enables exceptional solutions and services to benefit customers that otherwise would not be possible.

Working together, SAP and Northern Trust offer numerous advantages to insurers, including helping to ensure compliance with statuary reporting for all 50 states and accounting for several bases in parallel, such as US-GAAP and IFRS. The two companies also work to unburden insurers from having to maintain institutional investment management expertise in-house. With Northern Trust’s leadership, insurers can be confident they’re current on rapidly evolving best practices.

Podcast: Learn What’s Next from the Experts

By 2025, many insurers will be engaging with cross-industry ecosystem providers and defining opportunities beyond managing risk. Solutions like SAP and Northern Trust’s platform and services are essential to help insurers with automation and real-time data insights to embrace the future.

Learn more on SAP’s “Industry Insights” podcast,
where Josephine Monberg interviews Toni Tomic and
Chris Dvorak, head of Insurance Solutions at Northern Trust,
on what’s next for this successful pairing.


Toni Tomic is global head of Insurance at SAP.