The general insurance industry continues to face ongoing challenges in relation to profitability, over-capacity, competitive threats and the pace and scale of innovation. Internal Audit need to ensure it has sufficient breadth, relevance and adaptability in relation to these risks.
The tough market pressures facing general insurers of the last few years look set to continue into 2020. Whilst there are some hopes that rates may be turning, and actions taken to re-assess poor-performing accounts in 2018 are improving 2019 results, over-capacity and growing threats from new market entrants and international competition are likely to continue to pressure profitability.
In addition, continued economic doubts, through the threat of trade wars, growing nationalistic
tendencies across the globe, slow growth worldwide and instability caused by Brexit to the
Eurozone, place further pressures on investment returns and demand for growth. Despite such pressures to enhance profitability and growth prospects, insurers must invest to embrace new technologies and innovate to meet continually evolving consumer demands.
Internal Audit (IA) continues to play a key role in supporting business in managing, monitoring and providing assurance on the risks arising from diverse strategic challenges such as these.
Increasingly, as IA plans for 2020 progress, the challenge facing the IA function is the breadth of assurance needed, and balancing the breadth of assurance alongside pressures on resourcing levels, largely to align to cost-reduction programmes we are observing in many insurers.
Our overall view remains consistent with previous publications: that, to be ‘match fit’ in the
future, the future IA function will need to:
- Be strategically positioned within the organisation
- Be well-enabled by talent, technology and process
- Operate with an agile and innovative culture in order to provide assurance that provides insight and foresight
This publication sets out a series of ‘hot topic’ thematic areas for consideration in your 2020 IA planning. Page 3 sets out some considerations for Heads of IA in relation to Evolving and Innovating the Assurance Approach, to ensure breadth and sufficiency of coverage with increasingly stretched resources.
This publication has taken consideration of the report issued in 2018 and thematic points of future considerations for Head of IA.
Download Internal Audit Hot Topics