26th January 2022

Global insurers set out high level principles on the use of supervisory technology

The Global Federation of Insurance Associations(GFIA) has published a set of key principles related to the use of innovative technology by supervisory agencies to support supervision suptech).
As within the insurance sector itself, using technology for insurance supervision has the potential to streamline processes, reduce costs and lead to better-quality services. At the same time, new technology can also create new risks and unintended outcomes.
In general, the use of suptech should be in line with general supervisory conditions, such as materiality and proportionality. Additionally, the following six principles can help supervisors to maximise the expected benefits, while minimising the risks of using suptech:
-A structured dialogue between the supervisor and the financial sector on the use of suptech is required.
-The use of suptech needs to have a clear and achievable objective.
-The use of suptech should reduce rather than increase the administrative burden on insurers.
-While data protection, data quality and cyber security concerns must be paramount in the use of suptech, supervisors should, to the extent possible, share insights that result from suptech initiatives with insurers and society at large.
-The use of suptech should be treated with caution by supervisors, because having real-time insights could lead to role confusion.
-The context of data should be considered in a supervisor’s decisions on intervention.

GFIA Trends(58 articles)