09 April 2021

BIS: Redefining insurance supervision for the new normal

Lessons learnt from the Covid-19 crisis will be critical to future-proof insurance supervision. Streamlined and agile supervisory processes backed by resilient digital infrastructure and closer engagement with insurers and other regulatory agencies will be critical to help insurance supervisors cope with future unexpected disruptions.

• Insurance supervision in the new normal will redefine the demarcation between on-site and off-site supervision, with elements of remote supervision becoming a mainstay to enable more efficient and effective supervisory oversight in the future. However, remote supervision cannot entirely replace on-site supervision, especially in assessing behavioural aspects of insurers.
• Proper support structures to ensure the ongoing health and wellbeing of supervisory teams will be critical to maintaining effective supervisory oversight in prolonged remote working environments.
• The pandemic accelerated the digitalisation of both insurance supervisory processes and the insurance business value chain. As the pace and scale of digital transformation continues to increase, so will cyber security and policyholder protection risks, which must be appropriately managed.
• Supervisors will need to apply a more holistic approach to technology investments in the future. Adoption of new supervisory technologies will need to be complemented with capacity building programmes that equip supervisors with new digital skill sets required to adapt to supervision in the new normal.

Full paper

BIS

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