Insurance businesses are used to operating in a dynamic and ever-evolving environment. Amongst the many macro-environmental factors, advancements in technology are changing consumer behaviour and increasing the popularity of online and mobile platforms. Combined with rising Insurance Premium Tax (IPT), insurers are seeing an increased price sensitivity amongst consumers.
However, for the third year running, regulation and compliance have been identified as the primary concern for insurance business leaders in a recent report by PwC. Due to the quantity of existing restrictions and the rate at which new changes are introduced, many see regulation as a distraction to successful business processes.
Many modern insurance businesses are expected to have a quality sanctions checking process. Financial sanctions prohibit an organisation from carrying out transactions with a listed individual or organisation (target). Financial Sanctions apply to all transactions; there is no minimum monetary limit. Every organisation must perform searches against the lists applicable to their business to ensure clients, be they individuals or companies, are not on any government or international lists.
The Financial Conduct Advisory (FCA) requires insurance businesses operating in relevant markets to have proportionate systems and controls in place to reduce the risk of a breach of UK financial sanctions occurring. The penalties can be great, as the FCA has administered substantial fines to businesses deemed to have inadequate systems in place to perform checks where necessary.
The Role of Insurance Software
Insurance software can help businesses ensure compliance with financial sanctions. By integrating a sanctions checking service with the organisation’s back office administration system the insurer is able to perform a sanctions check at any stage in the insurance process, without having to leave their core system. Once the check is complete the insurer can continue the quote process having safely stored the information against the contact in the system. Information can be called at any stage, output and reported for compliance checks.
Northdoor provides a top to bottom sanctions screening service when integrated onto an insurance platform, really provides ‘sanctions screening taken care of’. Companies see sanctions screening as a laborious task and are constantly finding ways to improve efficiency around this. Each year more companies choose to go down the integrated route for that exact reason.
Most businesses now either have an integrated solution in place or have plans for this. This is something that is not going away and, in fact, will only become more complex after BREXIT.
AJ Thompson, CCO Northdoor says “Sanctions screening is a complex area that can be simplified with the use of sanctions screening tools and further by integrating on to familiar platforms.“
Many successful integrations have been performed in the insurance sector with more planned. Many modern insurance businesses are also expected to have a quality sanctions checking process.