• Blog
  • 2 Min Read
  • November 7, 2023

Regulation: Second Only to Cyber Crime, For Insurers’ Risk Concerns

In 2023, PwC and the Centre for the Study of Financial Innovation (CSFI) released their Insurance Banana Skins Report, scoring the top risks facing today’s Insurance Industry. We are reviewing five of these risks that we see our clients concerned about. This article is the first in the series. Read our other’s here: Technology, Interest Rates, Climate Change, AI.

Regulation, ranked number two, is proving to be a top issue on insurers minds.

What does this mean? 

Despite already being one of the most heavily regulated sectors, the landscape of regulations continues to evolve, expand and become increasingly complex. The heightened focus on ESG with sustainability and climate change at the forefront, the rise in crypto assets, and the looming Solvency II reforms, are only a few of the topics that are top of mind for insurers to ensure responsible risk management. With the multitude of regulation changes happening, it can be costly and time consuming for compliance teams to keep up, impacting a firm’s ability to invest in other areas like innovation and product development. Add the challenge of obtaining and retaining talent in today’s market means keeping ahead of regulatory impact is near impossible. 

We are consistently seeing how the changing regulations are impacting our insurance clients, evidenced by an increase in enquiries into certain regulatory reports, requests for additional regulatory reports and a consultative approach to share best practices.  

How do we see clients adapting? 

The key to handling these challenges is to navigate responsibly by meeting the regulatory demands without passing the cost burden to clients, reduce time spent on compliance checks, and not overlook the increasing transparency and convenience for information sought by clients. For many, this means investing in a strategic solution, instead of a tactical one. So far, insurers and other financial institutions impacted by the piling regulatory regimes have been relying on more tactical means, including manual excel sheets, and legacy technology with costly “add-ons” combined with heavy investments in workforce. This does not provide a sustainable forward-looking model, operationally or financially.  

This inevitably calls for adopting digitalisation and not just with any vendor, but a FinTech who will be your partner through your journey of growth, keeping at the forefront of any new future regulations and providing a best-in-class digital client experience. This is where = Clearwater Analytics comes in, with a cloud-native SaaS based platform backed by the power of a single security master and complemented with a best-in-class managed service model.  

We have Product SMEs for Regulatory Reporting, their sole focus is to ensure our clients stay at the forefront of any upcoming regulations, be it the evolution of ESG or Solvency UK, the goal is to minimise our clients’ operational and financial burden in getting them Reg Ready!