Staying compliant with a multitude of regulations has become an increasingly intricate and demanding challenge. Insurers and reinsurers must navigate a complex web of requirements imposed by various governing bodies and industry standards, affecting how business is managed from submission to outwards reinsurance. In this article, we will look at some of the main drivers responsible for causing this complexity before exploring strategies to effectively manage it.
Regional reporting requirements: A typical example is of cases where our clients transacting in both the US and Lloyd's markets need to submit different regulatory reinsurance reports for various locations. In these instances, finance functions must use ceded or retroceded data to produce Schedule F and Lloyd’s 710 reports, at different times of the year, on either side of the pond.
If you're curious about how the compliance process is creating challenges for finance and operations teams on the ground, here are some examples:
At the organisational level, failure to meet regulatory requirements can have severe consequences. Fines and penalties can erode profits, and incorrect reporting can damage the reputation of the organisation, resulting in a loss of client trust. To avoid such pitfalls, one must take proactive steps. While there is no one-size-fits-all approach, here are some ways to tackle them:
Increasing amounts of historical data combined with constant changes in regulatory requirements are bound to bring challenges. However, insurers and reinsurers should proactively assess their current capabilities and strategically invest in areas where necessary to not just avoid compliance issues but also to strengthen their competitive position in the market.
We have deep knowledge and expertise in outwards reinsurance that has helped our clients navigate some of the biggest challenges in outwards reinsurance. We will be sharing more insights over the coming weeks. Stay tuned for more updates!