Market volatility and global regulation are driving multi-national insurance carriers to increase their focus on controlling liability risks and improving transparency, according to a SunGard-sponsored risk trends reports for the US.

“Supervisory focus on risk and economic capital management underscores the importance of embedding strong risk management principles throughout an enterprise and moving beyond just ‘tick-the-box’ compliance,” says Don Canning, vice-president for SunGard’s insurance business. “Carriers must increase transparency around business workflows, and improve auditability across the enterprise. Beyond underwriting, life insurers are increasingly using analytics and predictive modelling to help create opportunities for increased sales and improved efficiency.”

SunGard has identified ten trends shaping the North American insurance industry, as follows:

1. NAIC's ORSA, inspired by Europe’s Solvency II, is placing greater emphasis on data and process governance, risk transparency and compliance, driving the need for data quality and consolidation that enhanced analytics can leverage.

2. Actuaries need faster, more efficient modelling and analyses to help improve risk management, requiring robust, grid-enabled and scalable technology environments.

3. The move towards cross-territory supervision of insurance groups calls for an holistic approach to risk management across subsidiaries and holding companies, and for platforms that can support risk visibility across states, territories and provinces, and lines of business.

4. US carriers are looking to centralise information from disparate and traditionally separate valuation and projection modelling systems to achieve consistent views of risk.

5. Ratings agencies are developing enterprise risk management assessments and embedding them into their evaluation process, which is placing more pressure on publicly traded insurance carriers to embed risk management intelligence throughout the organisation.

6. Increasing regulatory requirements and high market volatility are driving insurers to generate real-time investment and accounting information.

7. Insurers are using business intelligence to leverage 'big data' to help them estimate claims, assets, credit and market data, and gain deeper insights across networks of producers, policy holders and operations.

8. Analytic and predictive modelling techniques are creating opportunities for increased sales, as well as improved efficiency and expanded service capabilities.

9. Growing demand for highly specialised actuaries, increasingly at the heart of initiatives to improve risk management, is creating more competition among insurers vying for the best and brightest talent.

10. Volatility and the need for more frequent risk reporting require carriers to consider a pay-as-you-go business model in the cloud in order to scale up computing power rapidly and cost effectively.

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