Ensuring Regulatory Conformity through Digital and Standardized Consulting Processes

Ensuring Regulatory Conformity through Digital and Standardized Consulting Processes

The insurance industry, and in particular insurance sales, have been subject to continuous regulation for several years. Initially mainly the intermediaries were affected by the regulations (EU Insurance Mediation Directive) as a result of the conditions imposed on the consulting processes; with regard to consumer protection there are further product-specific regulations (e.g. LVRG or Priip ordinance) and all sales channels, including regulations concerning in-house services (IDD). In addition, the existing European and national regulations are continuously evaluated and adapted to the changed market situation. The next amendment to the LVRG is already pending.

Q_PERIOR supports you to achieve solutions when implementing the regulatory requirements. Solutions that help your company to remain competitive in line with the market requirements and your customers as well as the legal regulations, whilst also optimizing your processes.

Regulation as a (new) strong driver of digital consulting processes

In recent years, the digitization of insurance sales has generally been influenced by changes in customer behavior and customer values. Customers expect that information regarding insurance products is accessible at any time and place and that any insurance can be purchased via any communication channel. This is expected to have various positive effects such as customer proximity, sales potential or cost savings. This trend has been reinforced, on the one hand, by the increasing technologicalization of customers and their increasing affinity for technology (e. g. smartphones) and, on the other hand, by an increasing move of insurance business to the Internet, accompanied by the emergence of InsurTechs with seemingly simple consulting solutions for online-orientated customers. Another important driving force is the regulatory framework of the EU and the German legislator. The many different challenges no longer just affect the point of sale, but the entire value chain of an insurance company. From product development and employee qualification, the detailed design of sales processes, employee remuneration and up to reporting to the supervisory authorities. However, the objective of regulatory measures is always consumer protection.

Developments, such as the sales guideline, which was initially launched as an insurance mediation directive, the revision of the LVRG or the new Priip regulation, show that a one-off implementation of a regulation does not imply that the prerequisites for long-term business operations have been created. Currently, new regulations or adjustments to existing regulations are being made by legislators or supervisory authorities almost every year, or even at greater frequency. In addition there are a number of regulations that have become interdependent, complement each other if necessary (Priip regulations and insurance investment products) or lead to potential temporary conflicts (existing product information sheets vs. insurance product information documents). It is therefore all the more important for every insurance company to ensure that the further requirements are considered, when implementing individual regulatory regimes, and that the necessary flexibility for subsequent requirements is created or maintained. Insurance companies, for example, which already have an extensive digitization and standardization of consulting processes, have a competitive advantage as they can implement new requirements with relatively little effort. For instance, in the case of a consulting protocol that is integrated digitally, the consulting process can be adapted comparatively easily for the suitability test.

Proven procedure for identifying relevant processes

The strategic approach that enables the identification of all relevant processes is therefore recommended both in the context of a holistic approach and in the implementation of individual regulations. With the process identification it is possible to define all affected business areas during project preparation.

With the support of the Q_PERIOR Insurance Model and the Q_PERIOR Regulatory Impact Analysis Tool, the relevant processes are identified. The standardized procedure ensures that the business processes affected by the respective regulatory measures can be identified with high efficiency in a comparatively short time frame. The following deductions can be made from the identified processes:

  1. Which sales and business units and IT systems are affected by the required adjustments?
  2. How can the processes be designed to comply with regulations?

This is the basis for a successful project setup. The comprehensive approach and thus the management of “regulation” and “digital standardized consulting processes” not only ensures a reliable compliance with regulatory requirements, the associated optimization of sales processes also provides a real competitive advantage.

  • Authorization-driven sales modules – products can only be sold with appropriate qualifications
  • Automated monitoring of compliance – Sales of products in the defined target market
  • Simple adaptation of consulting processes to new or existing regulatory measures
  • Flexibility in process design
  • Optimization to increase process quality easily implemented
  • Efficient and transaction-oriented process design
  • Active support of the customer in the process flow
  • Customer support across all sales channels in all consulting phases
  • Customer-oriented processes (B2B and B2C)
  • Transparent customer advice and comprehensible action recommendations
  • Ensuring consistent, high-quality customer consulting services

Important for established and young market participants

The analysis and optimization of processes and business models, some of which have existed for many years, is the main focus of established market participants. But the proposed approach is not limited to existing insurance companies. Also young companies or those that are planning to enter the market are advised to deal with the regulatory compliance of their existing or planned processes from an early stage onwards. The numerous detailed regulations and the high fines imposed in the meantime can otherwise have a detrimental effect on the business of up-and-coming companies.
Q_PERIOR can support you with a profound understanding of short and customer-oriented processes as well as with a detailed knowledge of the regulatory requirements.

RegTechs support the implementation of regulatory requirements

Besides the already known Fin and InsurTechs, new providers are already present on the market with the so-called RegTechs. RegTech’s name is derived from the terms “Regulatory” and “Technology”. As the name suggests, these providers have specialized in solutions for the regulatory requirements of the financial industry. Currently (as of 02/2018), the main focus is still clearly on the banking and investment sector and in some cases B2B solutions are also offered in the insurance context (e. g. Priip solutions from investment companies for insurance companies). The range of services now available also includes solutions that can be adapted to the requirements of the insurance industry.

Regulation and digitization of the consulting processes belong together

In future, the same demands will be made on online and offline sales, at least as far as the fulfillment of consulting and information duties is concerned. European regulation thus anticipates the customer’s idea of cross-channel insurance sales. The potential of digital consulting processes supports simplified implementation and compliance with new regulatory requirements. For example, the intelligent use of Big Data models makes it possible to map an event-related consulting obligation on the basis of available data sources. Supported by an integrated CRM system, the online and offline channels can be intelligently linked together. Thus, for example, the sales channels are successfully linked by the use of web-based real-time communication tools, even for insurance products which require further explanation. Important data is therefore regularly available for all touchpoints in the right place and, if possible, updated.

Read more


With Q_PERIOR, you have a strong partner at your side.
We look forward to your challenge!