Take a new view of risk.
As insurers slowly emerge from the murkiness of the pandemic, they are presented with
another potential transformation. They can now reinvent themselves around the strategic
function of risk and compliance.
According to a recent article by McKinsey & Company, insurers have been focused over the
last decade on protecting themselves from downside risks and meeting ever-evolving
regulatory requirements. That view is changing. "Today, a significant transformation is gaining
steam as insurers must reinvent themselves in the multiyear reality of COVID-19, increased
levels of uncertainty, pressures for efficiency, and the need to be resilient and relevant by
tapping new sources of growth. The risk and compliance functions are expected not only to
go on protecting insurance companies from downside risks but also to shift toward providing
them with strategic advice to support growth (for instance, new business) and change (such
as company-wide cost and tech transformations)."
McKinsey believes that the risk and compliance leaders need to have a seat at the strategy
table. Since they are not involved in the day-to-day operations of the business, this would
allow them to see possibilities that others might ignore. And enable them to support growth
strategies that lead to stronger bottom lines.
Next Steps
The insurance industry has always been heavy users of data. So, it is natural to see carriers
gravitate towards emerging technologies like artificial intelligence and data analytics. And
while adoption in the industry is slow, and there is a long road ahead until it reaches its full
potential, AI is showing promise by unlocking value in departments across the enterprise.
Are you ready?
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