The COVID-19 Aftermath: Risk & Compliance Priorities Among Insurers
India Pulse Survey - July 2020
COVID-19 has led to unprecedented changes in socio-economic conditions globally. Needless to say, organisational priorities have reformed across the board and key objectives and focus areas are being re-strategised for the post COVID-19 environment.
The insurance sector in particular has borne the brunt of the pandemic – with increased reliance on insurance cover on account of interruptions to business, health hazards and uncertainty, newer fraud modus operandi and cybersecurity concerns.
Against this backdrop, we approached select risk and compliance professionals within the sector through a survey to understand how this black swan event has impacted their near and mid-term priorities.
Risk and compliance professionals continue to see significant pressure in sales and operations, leading to increased financial crime risks. Over 90 percent of the respondents indicated an increased probability of exposure to claims fraud and data leakage, and increased operational burden to investigate and close alerts/suspicious cases.
Insurers expect peer group information sharing, formation of working groups to disseminate new typologies, and regulatory guidelines around areas such as fraud monitoring to enable stabilization over the medium-term.
While most insurers have revisited their sales strategies and launched new operating models to facilitate digital sales, management focus has naturally stood towards addressing immediate customer requirements, leaving these new plans and strategies largely untested.
The overall environment of fear and panic could likely result in mis-selling and passage of incorrect information to customers. Instances of ‘ghost broking’ have already surfaced wherein fraudsters have been pretending to be legitimate insurers and brokers to falsely offer travel or business interruption insurance to unsuspecting customers.