Insurers are under constant pressure to enhance regulatory compliance procedures and provide evidence for fair treatment of customers and portraying improved conduct. We uncover how some modern day technologies can assist with these challenges.
The insurance sector is seeing unprecedented regulatory requirements on an ongoing, regular basis. Firms have been facing significant fines due to miss-selling scandals and unfair treatment of customers. Insurers are under constant pressure to enhance regulatory compliance procedures and provide evidence for fair treatment of customers and portraying improved conduct. Traditionally it has been challenging to manage, analyse and develop insights from communications with in-force insurance customers. New technology is being developed to address these issues.
There are a number of key areas where modern day regulatory technology can improve compliance effectively and automatically.
Regulation Requirement challenge
Regulation requires insurers to make various statements and disclaimers when communicating with customers. These interactions need to be recorded and reviewed during the auditing process. The challenge arises when the number of these interactions becomes so large that it is unfeasible to manually trawl through each one to check that the correct statements and disclaimers were made. Some firms end up only reviewing a tiny proportion of their customer interactions. Besides being at risk of not being compliant these firms are also missing valuable insights and trends that could have been extracted from these communications.
Instead of spending money on employees to use vast amounts of their time to sift through recorded information manually, technology can be embraced. Solutions exist to provide a robust, omni-channel audit trail which can cover everything from printed letters to face-to-face meetings. AI technology can be used to segment and analyse this data at scale. This allows firms to efficiently monitor 100% of their customer touch points with any significant cases automatically elevated for human review. This type of technology solution is already being embraced by many large organisations and are becoming increasingly accessibly to smaller firms and IFA’s.
Source: Actuartech Regtech 0.1
As well as improving compliance it can also be used to enhance customer care by monitoring engagement levels from customers, it can intelligently highlight high-risk instances, and it can be used to flag potentially vulnerable customers so that advanced support can be channelled to them. Staff involved with analytics have reported higher job satisfaction too as the tasks it automates are seen as ‘admin chores’ – the compiling and organisation of data. Technology does the heavy lifting allowing analysts to spend their time on areas where their full skill set is needed and where they have the best opportunity to add value.
Role for Actuaries
Actuaries can examine the information that technology has extracted from the data. They can use this to design more robust risk management framework strategies and develop better controls for ensuring compliance. Actuaries can also use the information from the interactions to identify customer needs and build better products.
Looking to the future
In time the speed and accuracy of artificial intelligence will continue to improve to understand the context and subtext of dialogue. This will allow for customer interactions to be better monitored and critical situations will be identified quickly, thus allowing for them to be swiftly addressed. The sales team will be able to use the information to enhance their performance and reduce complaints. Customer problems will be efficiently addressed, and this will save the company time and money. RegTech is set to transform culture and conduct within insurance companies, ultimately leading to a holistic identification and management of the root causes of such risks.
New regulatory technologies will assist actuaries as they go about implementing governance models, doing remediation activities, due diligence for acquisitions, overseeing controls and ensuring better service delivery and management for customers.
Summary of Benefits
- 100% monitoring of client interactions
- Greater regulatory compliance
- Efficient use of human FTEs
- Compliance and conduct related costs are reduced* Valuable insights can be discovered
- Future customer interactions are improved
- Contributes to an enhanced risk management and governance framework
Valerie du Preez, FIA, Dupro Advisory
Michael Jordan, FASSA, Dupro Advisory
Jonathan Drechsler, Head of Business Development – Recordsure
Contact us to learn more about the benefits of these and other regulatory and insurance technologies: firstname.lastname@example.org