Although insurtechs bring innovation, efficiency, and convenience to the insurance market, they are not exempt from the critical need to address financial crime risks and regulatory requirements. Customers expect an efficient, automated experience from online-first organizations like insurtechs, which means a dynamic approach to risk management is critical.
In chapter four of our Insurtech Financial Crime Guide, firms can score their programs against our fincrime checklist. Based on the list, this article explores five best practices that insurtechs can use to manage financial crime risks and regulatory compliance effectively.
1. Adopt a Truly Risk-Based Approach
A risk-based approach is foundational to financial crime risk management for insurtech companies. Instead of relying on a generic regulations checklist, insurtechs should embrace a more holistic strategy that assesses the specific risks they face and tailors their controls accordingly.
To embark on a risk-based approach, insurtechs should undertake an annual enterprise-wide risk assessment (EWRA). This comprehensive evaluation should encompass:
- Inherent financial crime risks: Identify the inherent risks associated with the…
