Industry Issues | ERM & Emerging Risks

Deloitte Releases 2019 Regulatory Outlook Report

Emerging Risk - Regulation
(risk assessment: financial, legal/compliance, operational, regulatory, reputational, underwriting)

Deloitte: Insurance regulatory outlook 2019

According to Deloitte, InsurTech is the next wave of technology innovation insurance and is pushing the entire industry to be more "customer-centric, data-driven and platform-based." However, its Outlook Report cautions that "regulators may find it challenging to develop a comfort level with InsurTech innovations and their proposed uses. Also, they may have trouble monitoring and assessing the effect of InsurTech use." Deloitte urges insurers to inform and involve regulators early in the process of InsurTech adoption. However, the report also cautions that there are cybersecurity and data privacy concerns that need to be addressed.

The report further delves into the broader matters of cybersecurity and data privacy. The outlook in this area "continues to indicate strong regulatory developments, with several countries either implementing or enhancing existing regulatory requirements," says the report.

"Within the United States, organizations can also expect to see continued attempts toward simplification of regulatory compliance requirements. as well as continued efforts toward harmonization of data privacy and cybersecurity laws and regulations," according to Deloitte.

Deloitte reports that today's regulatory environment is in the midst of significant and unpredictable change, driven by a variety of forces including political shifts, new social norms and behaviors, and technological innovation.

"To succeed in this challenging environment, companies need to actively look for ways to improve the effectiveness and efficiency of their compliance strategies and operations. Technology is likely to play an increasingly important role in this pursuit. Robotic process automation, for example, is being widely adopted by compliance-related functions to help them do more with less. At the same time, emerging technologies such as artificial intelligence and advanced analytics are making it possible to do things that have never been done before. Innovations like these can create business value no matter which way the regulatory winds might shift-enabling leaders to take action confidently and decisively in times of significant and ongoing change."
- Deloitte

The Deloitte 2019 Regulatory Outlook also the emergence of a “customer best interest” standard; Conduct risk; Market conduct; fraud epidemic; capital standards; InsurTech; and Analytics and modeling in risk and compliance.