BIS: Redefining insurance supervision for the new normal
09 April 2021
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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