The new focus based on a risk culture means that companies and financial institutions are changing the way they perceive and value their business. The adoption of this focus requires sophisticated control mechanisms which mitigate exposure to risks not assumed by the company.
The interpretation and handling of large databases means that it is now possible to achieve a more detailed and accurate consumer analysis in terms of trends, claim ratios, loyalty etc. which is very useful information for the management of insurance companies and the effective distribution of their products.
Each individual has their own unique perception of their needs when it comes to protection. The analysis of trends, biases and patterns of behavior allows the product range to be both extended and individualized in a way that is far more efficient for consumer and insurer alike.
The speed of change in the modern world is dizzying, above all in terms of technology and industry. This means that almost on a daily basis we must face new risks which were previously unknown and must be analyzed and assessed. These risks must also be mitigated, almost in their entirety, by various forms of insurance.
The environment conditions established by Solvency II and the adoption of capital criteria based on risk, means that insurers must not only carry out an in-depth review of all of their internal processes, but also develop control strategies which will constantly enhance them.
In order to guarantee that the insurance industry operates in a responsible way, managers, employees and all related parties, must ensure that there is full compliance with regulations. An equally significant aspect is adherence to the individual codes of ethics and policies in every company.
An issue that has generated huge discussion is the provision of public pensions, which will demand profound structural changes in the near future. Private savings will be needed to supplement public cover, so that the developed countries can guarantee economic and social stability.
The development of societies and their economies, along with the global advancement of understanding of risk and its consequences, have all created a need for insurance products, which is ever more sophisticated and tailored to each client in their individual circumstances.
The digital technology revolution means that we see the world and our daily lives in a new way. The ease, speed and efficiency that this new technology provides, represents a clear advantage to those companies capable of adapting their processes to the new reality.
Insurance companies have carried out hard-hitting reviews of their investment strategies in order to adapt to new market conditions. The ongoing situation of low interest rates is a new circumstance which ushers in a range of innovative approaches to investment.
The regulation of the insurance sector protects the interests of customers and those harmed by wrong-doing. However, regulation can also have undesirable effects in terms of damaging competitive advantage, transnational cover arbitrage and various other inefficiencies in the insurance market.
In order to guarantee the long term presence and operation of insurance companies in the economy, the players must continue to cultivate best practice forms of corporate governance. These practices must perform in the field of internal management and relationships with stakeholders, as well as the impact insurers bring to bear in a broader societal context.