Risk management and the promotion of transparency

are fundamental for insurance business, as they make it possible to identify, assess and manage the risks inherent in the insurance business (across the board, whether the entities are the insurers themselves – although there is a significant preponderance of more and/or larger actions to be taken, insurance brokers or even insurance intermediaries), guaranteeing solvency, stability and market confidence. Risk management involves identifying risks, assessing their likelihood and impact, defining preventive and corrective measures, and continuously monitoring their performance.

Insurers must manage risks by adopting various preventive actions and strategies aimed at minimizing the effects of any incidents that may occur in the day-to-day running of the company, with the aim of mitigating risks and preserving the insurer’s assets. Some of the measures that can and should be implemented are:

Identifying risks,

assessment of their likelihood and impact, definition of preventive and corrective measures, and continuous monitoring of their performance.

Adoption of codes of conduct,

risk prevention plans, internal control and auditing mechanisms, and whistleblowing and whistleblower protection systems.

Risk prevention plans

Requirement for medium-sized and large companies to have risk prevention plans for corruption and related offenses, and to adopt compliance and social responsibility measures.

Creation of cooperation

and information-sharing networks, encouraging the participation of citizens, civil society organizations and the media in monitoring and fighting corruption.

Regular production and dissemination

of reliable information on the phenomenon of corruption, through the production of a national anti-corruption report, studies and indicators, and the provision of open and publicly accessible data.

International cooperation

in the fight against corruption, fulfilling the commitments made within the framework of international organizations and instruments, and strengthening legal and police cooperation with other countries.

Promoting transparency,

in turn, implies the clear, objective and accessible disclosure of relevant information about the insurance business, such as products, services, prices, conditions, risks, guarantees, exclusions, obligations, rights and duties. Transparency allows clients, regulators and society in general to better understand how the insurance market works, assess the quality and suitability of the products and services offered, and monitor compliance with rules and standards of conduct.

A whistleblowing system can contribute to better risk management, among others those associated with the financial area (including the BCFT risk – Money Laundering and Terrorist Financing, multiple suggestions on how to prevent this have already been covered in previous articles) and the promotion of transparency in insurance service providers, as it allows employees, clients and suppliers to report any violations of the company’s rules, procedures and ethical values, without fear of reprisals or retaliation. The whistleblowing system must be confidential, secure, accessible and effective, guaranteeing the protection of whistleblowers, the rigorous investigation of complaints, the correction of identified irregularities, and the continuous improvement of processes and results.

In summary, risk management and the promotion of transparency are essential for the sustainability and competitiveness of insurance companies, insurance brokers and insurance intermediaries and a whistleblowing system can be a valuable tool for the prevention, detection and correction of possible deviations and irregularities, contributing to the integrity, trust and reputation of the insurance market, significantly reducing multiple risks associated with the insurance business.

Find out how our whistleblowing software can strengthen the transparency of your insurance business.

Published: 2023.11.29