Insurance Risks 2018 | KPMG Belgium
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Insurance Risks 2018

Insurance Risks 2018

Insurance Risks 2018

Emergence of fast evolving digital technologies, increased regulatory pressure and global economic uncertainty are key factors in the current risks landscape. KPMG Risk Consulting assists clients to develop robust risk mitigation methods by interpreting the underlying drivers of global risks.


Challenges owing to the transition from traditional models to newer aggregator based and direct-to-consumer models which provide real-time services

  • Expanding international operations leading to risks due to non-compliance with various regulations, economic and political developments, discriminatory fiscal policies etc
  • Major upheavals such as diseases, strikes, and other natural disasters can affect operations in national and international markets
  • Operational risk resulting from inadequate or failed internal processes or systems impacting the operations of the business
  • Competitive pressures resulted from lowered technological barriers to entry due to emergence of open source frameworks, scaled cloud computing and development of On-Demand services
  • Inability to attract and retain qualified personnel while appropriately managing costs related to employee benefits

Profitability and Liquidity

Life insurance risk, includes longevity risk (annuitants living longer than expected) and mortality risk (customers with life protection dying)

  • Low interest rate environment in a number of markets around the world, are resulting in low current reinvestment yields, primarily for investments in fixed income securities and commercial mortgage loans
  • Credit risk, risk of failure of financial institutions, counterparties and third parties to meet payment obligations
  • Liquidity risk, owing to the inability to raise funds on a timely basis or at a reasonable cost to fund asset growth or settle liabilities; and Solvency risk in terms of adequate levels of capital
  • Investment risk due to adverse movements in interest rates, exchange rates, stock prices and commodity prices
  • Deterioration in global economic conditions adversely impacting business operations and profitability
  • Reserve risk, if the reserves earmarked are not sufficient to cover claims to be settled in the future due to unexpected changes
  • Differences between actual claims experienced and underwriting and reserving assumptions owing to certain methodologies, estimations and assumptions used
  • Risks arising from uncertain events such as fire, flooding, windstorms, accidents and other natural/man-made disasters and the ability to obtain/afford reinsurance


Risk and cost of compliance due to changes in international and domestic laws, rules, policies, regulations (e.g. SAM), technical standards and trade policies

Reputation and Ethics

Risk to reputation/brand as a result of negative assessment or comments from stakeholders


Threat from InsurTechstartups gaining competitive advantage by focusing on innovative products and services for meeting customers' changing needs, augmenting capabilities, utilizing new approaches to underwriting risks and predicting loss, and developing enhanced operational capabilities

  • Increasing need to improve profitability and attain competitive edge through automation of business processes and adoption of emerging technologies
  • IT risks relating to malfunction or disruption in the operation of the systems, or cyber-security breaches, could adversely impact the company's ability to compete

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