INSURANCE SECTOR
Sithumina Jayasundara
UNDERWRITING THE FUTURE
The strategic role of insurance in mitigating risks and facilitating progress
Primary aim of insurance
To offer individuals and businesses financial protection against various risks, such as property damage, liability and loss of income.
More aims
Promoting stability and security in financial planning by facilitating the transfer of risk from policyholders to insurance companies.
Service outcomes
Expert risk management, financial stability and diverse insurance products ensure effective risk handling, meeting customer needs and withstanding market fluctuations.
Economic contributions
Enabling investment, entrepreneurship and innovation, while supporting business continuity and resilience by covering losses and liabilities.
National contributions
Job creation, revenue generation and contributing to GDP – through insurance premiums and related services.
Trends
Digital transformation, ‘insurtech’ (insurance technology) adoption, and innovative models such as usage-based and peer-to-peer insurance.
Focal points
Sustainability, and environmental, social and governance (ESG) in risk management.
Purpose of underwriting
To evaluate risks; set profitable policy terms; utilise data analytics for informed decision making; and balance risk, pricing and diversification to optimise performance.
Key covers
Property insurance for damages, liability for legal issues, health for medical costs, motor for vehicle incidents and business insurance for diverse risks.
Impact of deductibles on premiums
Higher deductibles mean lower premiums with policyholders bearing more claims risk while lower deductibles result in higher premiums due to increased insurer risk.
Purpose of deductibles
Deductibles enable policyholders to customise coverage and balance premium costs with out-of-pocket expenses based on risk tolerance and financial circumstances.
Assessing risk
Insurance professionals use actuarial analysis, statistical modelling and risk assessment to quantify risks.
Rewards
Diversification, reinsurance and risk retention optimise risk-return profiles, by adapting to evolving risk landscapes, threats and regulatory changes – and promoting resilience and sustainability.
Reinsurance’s role
Provides capacity and capital support in the event of catastrophic risks, large loss events and unexpected claims volatility.
Outcomes of reinsurance
Promotes growth and innovation; and underwrites expansion by offering additional capacity, expertise and risk sharing arrangements.
Current challenges
Navigating global regulations; and meeting evolving customer expectations, preferences and demands for personalised products, seamless experiences and transparent pricing.
Tech dimensions
Cybersecurity, data privacy and tech vulnerabilities in a rapidly evolving digital environment.
Role of actuaries
Actuaries in insurance companies play a critical role in risk management, pricing, reserving and financial reporting.
Actuarial process
The use of mathematical models, statistical techniques and data analysis, to assess risks, project future liabilities and ensure financial stability.
Expertise of actuaries
Enable decision making and strategic planning; and maintaining solvency and profitability in the insurance sector.
Employee training
To equip employees with skills and knowledge to navigate changing market dynamics, and address emerging challenges.
Sector developments
Digital channels, mobile apps and self-service platforms for insurance interaction.
Impact of technology
Insurance is transforming the automation of underwriting, claims processing and customer service tasks to boost efficiency, cut costs, and improve speed and accuracy.
Tech processes
Adopting AI, machine learning and predictive analytics for tasks such as risk assessment, fraud detection and customer segmentation.
Virtual integration
Integrating digital platforms, mobile apps and Internet of Things (IoT) devices to provide innovative products, personalised experiences and real-time monitoring.
Security measures
Insurance companies must implement robust cybersecurity measures, encryption protocols and access controls.
Purpose of security measures
To mitigate cyber risks and ensure compliance with regulatory requirements.
Stakeholder dynamics
Collaboration with experts, partners and regulators is crucial to stay updated on digital security threats, best practices and compliance.
Navigating uncertainties
Requires adaptive risk management, prudent underwriting and proactive customer support for financial stability, and to aid policyholders in crisis.
Professional growth
Prioritise customer-centricity, digital literacy and ethical conduct for lasting connections, innovation and professional integrity.
Careers in insurance
Require strong analytical skills, effective communication, ethical conduct, adaptability, resilience and a commitment to continuous learning.
Mantra for success
Never give up.
Impressive