Insurance providers have seen a flood of regulatory changes in recent years—a flood that is expected to continue, as we have seen already happening in the banking industry. As the amount, complexity, and strategic importance of regulatory requirements continue to increase, insurers must understand and manage the impact to their businesses.
To succeed in this new environment,. Regulatory management needs to be handled diligently, and it requires clearly defined roles and responsibilities within the organization.
BCG has developed a universally applicable regulatory management framework as a result of its experience with companies across multiple regulation-heavy industries, such as banking, pharmaceuticals, energy, telecommunications, automotive, and insurance.
The framework’s 12 building blocks cover all regulatory activities, communication channels, and organizational concerns.
Regulatory Map. Identify and structure all current and future regulations and relevant decision processes.
Stakeholder Map. Identify relevant stakeholders and allocate them to internal relationship managers.
Impact Analysis. Identify threats and opportunities among upcoming regulatory trends. Understand their impact.
Regulatory Strategy. Focus on and respond to key regulatory trends.
Business Strategy. Identify which regulations create competitive advantage.
Implementation Plan. Create a comprehensive and efficient roadmap for implementation of the processes required for compliance.
Implementation. Ensure the regulatory processes are implemented correctly and are working effectively and efficiently.
Planning and Ownership. Create a holistic communication plan to express the company’s view on regulatory trends.
Goodwill. Leverage cultivated public acceptance and perception.
Coordination. Reiterate corporate point of view to stakeholders and measure success.
Setup toward Stakeholders. Guide stakeholders through networks, channels, and formats.
Organization. Create an internal organization that allows for effective and efficient regulatory management.
Each of these building blocks consists of many detailed analysis, planning, execution, and forecasting activities that can guide an insurance company through the process of understanding and complying with new regulations.