DTCC Insurance Customer Survey Shows Meeting Regulatory and Compliance Requirements Top 2010 Priority
A recent customer survey conducted by DTCC revealed that satisfying more stringent regulatory and compliance requirements is the top 2010 priority in the insurance industry.
While the goal of regulation is to create safer markets by enhancing transparency and efficiency, 40% of respondents say that successfully meeting these demands will require greater automation and standardization in their operational practices. While these mandates are high on the agenda, the survey also shows budgetary constraints make them challenging in a tighter fiscal environment.
“DTCC is committed to partnering with the insurance industry to meet the challenges of a more demanding regulatory environment where mitigating risk and increasing transparency are crucial for sustainable growth,” said Adam Bryan, DTCC Managing Director, Insurance & Retirement Services. “Bringing greater automation and standardization to the insurance industry is critical to successful adaptation to the ever-changing regulatory landscape.”
Since 1997, DTCC’s Insurance & Retirement Services has worked closely with the insurance community to provide a suite of services that help foster growth, reduce paper flow and lower costs by bringing the scalability and efficiency of automation to the markets.
After regulation, budgetary constraints ranked second as an issue, with approximately 28% of respondents listing it as the number one challenge for growth. Conversely, regulation requirements also surfaced as bringing more opportunities for growth, with nearly 32% citing that a standardized compliance solution would provide greater transparency, lower costs and forge the industry forward.
“Moving in to the next decade, this survey shows that the insurance industry will be working toward greater adoption of automated services, which will impact their ability to meet regulatory demands,” Bryan explained. “An example of DTCC’s role in introducing more automation is the recent launch of Attachments, a new electronic solution designed to streamline the processing of required paperwork and signatures for pre-sale and post-issuance transactions in the insurance industry.”
Other noteworthy survey findings include:
- 25% of participants listed on-line applications as the most critical component to straight-through-processing.
- 20% of participants claim that less costly, front-end transactions would encourage industry growth.
- Global expansion and merger activity were seen by a significant number of participants as having the least impact on influencing industry growth. 33% ranked global expansion as the least important factor, while 20% cited merger activity as the lowest in importance.
- Roughly 17% of participants ranked Centralized Product Profile Management and access to real-time confirmation of Licensing & Appointment status as the most critical component to STP.
“Our in-depth research yields similar and complementary findings to DTCC’s customer survey; straight-through processing and integration of books and records are key areas for investment in the broker/dealer community,” said Doug Dannemiller, senior analyst at the Aite Group. “Certain brokerage products, including variable annuities, have historically been more difficult to process efficiently, and with these processing inefficiencies also comes regulatory and compliance difficulty.”
Survey participants included insurance carriers, broker/dealers, vendors, clearing firms, solution providers and DTCC participants.