Insurance Industry: We Have You CoveredGRC | 4 Min Read |29 June 22|by Suneel Sahi
All That Glitters Is Not Gold
The Bank of England on Threadneedle Street London is the eighth oldest bank in the world. Don’t ask me how I know this or to name the other seven, but last week while having dinner with some colleagues overlooking this remarkable building, we were discussing how this bank’s vault stores over 40,000 gold bars.
As conversations go, we moved from topic to topic during our first course. We discussed the state of the world and how central banks are taking an aggressive timeline to tame spiraling inflation rises. We also pondered on the cost-of-living crisis, squeezing oil supplies, plummeting equity prices (at least for the first half of 2022), ongoing geopolitical tensions, and possibly the start of a recession. The dialog gradually morphed into how the bank insures itself against this gold and how resilient the insurance industry is.
Onto the Starter Course: Insurance Is Transforming
Along with having to deal with the post-pandemic effects, the insurance industry is grappling with accelerating regulatory pressures, mounting cyber risks, and increasing climate catastrophes. You can add supply chain disruptions, migrating to the cloud, and a drop in talent retention to the list. Commercial insurance started hundreds of years ago within the shipping industry as a means to protect against looting. Cyber insurance is a more recent development that began around the 1990s and is critical, as today, the most valuable assets are stored in the cloud.
Insurance companies have built and acquired vast customer databases that reside in detached and disconnected systems and human intervention is usually required to locate, gather, and operationalize them. Data and consumer protection will always be driving forces in this industry, with further reliance on digital networks. But what we are witnessing is the revolution of digitalization and how in recent times it has been transformative with technology innovation. This includes intelligent automation, cloud computing, and automated claim processing leading the way in projecting efficiencies across automated workflows. Another name to describe this positive disruption is InsureTech.
Main Course: Business, Cyber, & ESG
We have entered a new era with sensitive information, data breaches, and ransomware dominating the headlines. Cyber risk has more than quadrupled since 2002 and tripled since 2013.
At the end of March 2022, all European Union (EU) institutions and agencies were required to have cyber security frameworks in place for governance, risk management, and controls. And with regulation, it does not stop there as these changes will need to be reflected in business processes.
A common risk language makes it simpler to communicate and report risks. Meanwhile, standardized issue management processes allow stakeholders to identify quickly which issues are associated with which risks.
As a heavily regulated industry, insurance companies are now grappling with the interconnectedness and multifaceted ESG challenges that need urgent attention to identify, collate, and report the correct data through an ESG framework. Outsourcing has become an established way of working for (re)insurance leading to third-party risk management (TPRM) gaining an increasingly important part of your risk profile. The ESG objectives and mission need to be clearly demonstrated. The purpose and ethos of a company are up there with profitability.
Insurers have embraced cloud technology. As well as allowing organizations to be more agile, the cloud is an ideal platform for data storage across the systems as it is secure, scalable, and reliable.
Dessert: MetricStream Brings the Next Generation of ConnectedGRC System for Insurers
At MetricStream, we have been working alongside insurance giants for years. Our solution is built to identify, manage, collate and operationalize risks across the enterprise.
Whether it is internal audit, enterprise/operational risk management, third-party risk, incident management, compliance and policy management, cyber and IT risk, or ESG, at MetricStream, we have you covered with:
- Real-time aggregated view of risks and compliance status
- Quantifiable risks to prioritize risk treatment plans and investments
- Advanced AI-enabled automation and continuous monitoring capabilities
- Federated data model to bind together your core GRC libraries
- Secure private cloud architecture
Read the case studies from the insurance industry:
The dinner conversation then moved to digital assets, stable coins, and NFTs. At that point, I knew it was time to leave.
If you want to know more about how we can help your insurance company effectively manage and mitigate multi-dimensional risks, reach out to me at [email protected]
You can also request a personalized demo of our product.
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