In the insurance sector, compliance is a crucial risk factor. Various rules, guidelines, and regulations are given by the regulator and when your company doesn’t comply with any of these, it will negatively affect your company’s reputation. It could also lead to financial loss and in some instances, the proper authorities can cancel your company’s license or refuse to renew it.
Many small to medium businesses or SMBs ignore compliance until they face a problem that will force them to take action. The most common reason is that SMBs are too focused on operations. Integrating a new technology that could both streamline the company’s operations and manage risks can keep the company afloat and help attain its goals.
Below are some of the tips that can help insurance companies manage compliance risk while they scale.
1. Conduct a risk assessment right away
You won’t be able to manage compliance risks when you are not aware of your risks. So, it is important to conduct a risk assessment right away. Knowing your risks will keep you from being left behind by your competitors. It can also help you avoid significant financial and regulatory risks.
All of the components that comprise your compliance program, including your policies, tone at the top, and due diligence, will accomplish nothing if they do not target the right risks. It is why an in-depth and science-backed risk assessment is necessary.
2. Utilize a unique compliance strategy
Aside from using an effective insurance policy management software, your company can gain competitive advantage towards other companies in the insurance sector when you implement a unique compliance strategy. Use well-planned compliance management programs that anticipate future trends across business industry, services, products, and geographies.
With the best practices and right technology, you can achieve effective compliance management. It is not difficult to be ahead with today’s tools that can acquire data from your systems and point out what contradicts the policies you desire.
3. Understand recent enforcement policies
Usually, compliance risks include various areas such as export control, data protection, and anti-corruption law. Ensure that you understand the requirements set by all relevant laws and regulations as part of your risk assessment. You should also keep up with the enforcement agencies’ latest guidance and enforcement policies.
4. Keep monitoring your compliance efforts and update them
Your compliance efforts should keep up with the changes within your business. Managing compliance is not a one-time effort of setting up processes and writing policies. Instead, you should evaluate and update them regularly.
5. Save time and resources using automation
Managing compliance includes multiple tasks, including chasing employees for signatures, retrieving records from many non-centrally stored documents and spreadsheets, etc. When you automate these processes, it can provide you better insight into your data and eliminate your frustrations that will let you enhance your program.
6. Make sure to establish a culture of ethics and compliance
Compliance offers to prioritize meeting the expectations of the authorities. While there is no problem with this, the problem occurs when it leads to a myopic emphasis on compliance risk management as a tick-box exercise. A far bigger, organization-wide effort is required to bring compliance and ethics to the center of the business.
This article emphasizes the importance of managing compliance risk. Even a simple compliance risk could become a huge problem when neglected. So, it is important to detect them earlier during the compliance risk assessment to determine the necessary solution.