The insurance industry has been revolutionised through the introduction of insurtech. Reducing the time it takes for customers to be given a response, along with reducing operational costs are only a couple of the many advantages technology in the insurance sector has enabled. An important area that needs to benefit from the introduction of insurtech is regulatory checks as the right technology solution will automate much of the standard checks and business workflows that surround compliance, freeing up time for brokers and insurers to work on their products and ultimately spend more time on their customers.
This is the view of Stewart Griffiths. Griffiths is CEO and co-founder at London-based automated risk, compliance and regulation software specialists, Albany Group. Griffiths served as a Royal Marine before moving into the security and intelligence industry — ultimately transferring his skills to the risk intelligence and regulatory compliance sector. His experience allows him to analyse threats and opportunities — and rapidly apply pragmatic problem solving to achieve objectives.
Here, Griffiths describes how the insurance industry can apply technology to embed regulatory compliance and improve workflows with supply chains:
The problems the industry faces with applying technology
The insurance industry has successfully used technology to enhance its offering and operations. Through technology, companies have been providing services that are becoming more closely aligned with changing customer expectations and needs.
Take for instance the way the industry transformed with brokers allowing consumers to view and purchase claims online as consumers increasingly gained internet access and online shopping started to take off. However, technology is now increasingly being used to enhance operations as well as managing the regulations governing the industry.
Research by Deloitte into the key areas insurance companies are looking to employ technology in, found that automating manual processes (77%) is by far the area they want a solution to solve. Alongside reducing operational costs (54%), responding to competitors’ use of technology (54%) and increasing the speed and quality of oversight (42%).
Industry leaders have long understood the importance of technology in enhancing operations, however, finding the correct and balanced solution has proved a different matter altogether.
Much of the industry has focused the application of technology to policy administration and claims systems, whilst on the other hand have neglected the likes of regulatory compliance, governance and supply chain management. Another issue is many opting for a complete overhaul almost overnight causing significant disruption. While others simply do not quite understand the task and may hold perceptions that improving industry-critical solutions such as supply chains and regulatory compliance may be difficult and disruptive to implement but this is not always the case.
However, since the pandemic, these areas are increasingly coming into the crosshairs of leaders who are applying technology to adjust to this new normal. Research by KPMG has found that 85% of insurance CEOs have accelerated digitisation of their operations since the pandemic.
How technology can be applied to solve regulatory compliance
We’ve noticed that in the last few years that compliance has expanded. Yes, an element of this can be attributed to the pandemic, but largely because of the abundance of data and the numerous points this is connected with. As a result, it is much more difficult to assess risk levels. Nevertheless, this is a crucial component of the industry’s day to day, which must be undertaken, particularly with regulations in place such as ESG rules in company reporting notwithstanding GDPR for consumer privacy.
Recently, regulators have really honed in on procurement and contracts, meaning insurers and brokers need to carry out extensive checks, which can be extremely time-consuming. In 2019, The FCA issued a record number of fines, while according to McKinsey, between 5-10% of all insurance claims are fraudulent. For the insurance industry, the regulations and actions of the FCA have forced several insurers to really audit every aspect of their data storage and management, in an almost forensic way.
Despite this increased scrutiny by regulators, insurers can streamline this process and use technology to embed a system that can do much of this legwork and thus free up valuable time, whilst ensuring compliance with the regulations.
A technology system does not need to be all-encompassing and something that will put added pressures on already stretched IT teams. Moreover, a code-free easy to configure solution can be applied to solve the issues the industry is facing around embedding regulatory compliance by automating processes and minimising the risk of human error.
Why technology is critical in managing workflows and improving efficiencies with supply chains
The nature of the insurance industry currently means that businesses are dealing with an ever-growing list of counterparties daily. This can range from brokers to cover holders, TPA’s, managing agents, delegated authority and claims management firms, meaning a supply chain with thousands of moving parts.
The abundance of data means more and more information needs to be digested and processed by teams drowning in emails, spreadsheets, slow and inefficient workflows and a barrage of information.
A technology solution can be applied to a single portal to manage and gain better oversight of third parties, analyse data and automate workflows. This can have a significant impact on the way teams operate, it is estimated that automation alone can reduce the cost of a claim journey by as much as 30%. We recently provided a solution for QBE, using our Conect technology, which improved workflows, but also saved on operational costs by streamlining otherwise time-intensive tasks.
By providing technology to automate admin and workflows, businesses can increase the efficiency of their teams by lifting administrative burdens, allowing them to channel their focus on what matters most, improving services and customer experiences.
Ignorance is no defence when faced with action by regulators. It is your responsibility to be on top of your suppliers, partners, cyber risk and operational resilience.
The right technology solution will automate much of the standard checks and business workflows that surround compliance. Perhaps most importantly, a technology solution to regulatory compliance and supply chain management frees up time for brokers and insurers so they can do the good stuff like creating new and innovative products and engaging with their customers.