<img src="https://secure.leadforensics.com/85060.png" style="display:none;">

The Insurance Act: A New Dawn for Risk Management

New_Dawn.png

With the new UK Insurance Act coming into force August 2016 and applying to all insurance placed in the UK market, it is vital that companies act now in order to get their ‘houses in order.’ It is certainly a case of ‘fail to prepare, prepare to fail’ when it comes implementing the right systems and processes now required.

Traditional processes used to support DoD (Duty of Disclosure) are no longer adequate in the more demanding era of DoFP (Duty of Fair Presentation). Today, data is collected via ad-hoc processes including conversations and emails and disparate systems including multiple spreadsheets are used to record information. As such, information cannot be easily consolidated or data aggregated to present a clear set of statistics.

With this lack of process in place, can Risk Managers really afford to assume compliance?

Getting it right

Risk Managers can no longer supply underwriters with a mass of data – much of it unstructured. Under the Act, pertinent information must be flagged up front to be easily identified as material to the insurance risk.

There are also a number of transparencies that now need to be taken into account – for example change of activity or occupation has to be highlighted and as do any new or risky locations. Within Oil & Gas this will mean Risk Managers must identify those rigs operating within deep water or at high pressure. A new business venture into a higher risk geography, such as the Middle East, must be identified and highlighted as material to the risk.

Rather than having to manually work through each line of a spreadsheet to check for key risks, the right technology is a great enabler to quickly categorise and assemble reliable data for presentation to the insurance market.

Clear processes

In order adhere to the Insurance Act it is vital that the new requirements are considered, and marked against the current processes. Questions which should be asked are:

  • Is the audit trail clear for evidence and compliance verification?
  • Is there proof that the right people have been asked the right questions?
  • Can it be demonstrated that verification for all the information that ‘ought’ to be known by managers has been provided?
  • Is there confidence that all material data has been both collected and then presented to the market?

Having a reliable piece of technology that logs all information provides you with confidence that all relevant individuals are part of the information collection process.

The risks of non-compliance

In short, too many Risk Managers are downplaying the shift from DoD to DoFP. These two requirements are fundamentally different and it is critical that Risk Managers get their processes right.

It is essential that your business:

  • Is comfortable with the current processes for collecting and presenting risk data
  • Recognises the changes outlined from the DoD to the DoFP
  • Understands the full consequences of non-compliance with the insurance act

Is your business prepared to take the risk of non-compliance?

JohnIrving.png

John Iriving is a Business Development Manager based in London. Contact John at john.irving@ventivtech.com or +44 (0) 20 3817 7407. Connect with John on LinkedIn: https://uk.linkedin.com/in/johnirving86

 

 

Download Preparing for the Insurance Act 2015 Guide

May 26, 2016

 | Originally posted on 

Subscribe by Email

No Comments Yet

Let us know what you think