The current array of new regulatory requirements facing the insurance industry is daunting. The Dodd-Frank Act, Solvency II and efforts to converge international accounting standards all portend significant operational consequences for insurers.
While the actions of U.S. and European regulators garner a great deal of attention, the push to reshape insurance regulation is global with Asian insurance regulators also putting forth a series of preemptive reforms to tighten the management of insurers.
In response, carriers are demonstrating proactive risk stewardship and strengthening their ability to comply with higher prudential standards said Li-May Chew, associate research director for
Indeed, a new
“As firms chart strategies to navigate the deluge of regulations that have appeared on the radar, they can choose to accept and follow conventional wisdom, or to tackle the tough questions head on by formulating coordinated regulatory response strategies that create value-enhancing outcomes,” said Cubillas Ding, Research Director at Celent and author of the report.
Among the actions insurers could consider, Ding says they should adopt a portfolio-based approach to regulatory projects and pay special attention to future-proofing IT investments, including exercising leverage from regulatory investments to build out enhanced business capabilities. “Just as the regulatory stakes have been raised, firms should look to raise their game,” he said. “Reactive strategies, uncoordinated responses, and “bare minimum” tactical approaches will no longer suffice. There is a smarter way.”