After two years of unprecedented challenges to the industry, insurers could be forgiven for hoping for a period of stability to take stock and the opportunity to return to the forefront of the financial services agenda. Whilst a period of calm reflection may be optimistic, the past year has brought a number of strategic priorities into focus.
Data and technology continue to permeate all areas of focus, through improvements in operational efficiency, the collection and use of data, to fraud and financial crime. From a regulatory point of view, in 2021 fines issued by data protection authorities exceeded €1 billion, clearly demonstrating an increase in regulatory scrutiny in relation to how organisations are managing personal data. This trend shows no sign of abatement in 2022, with potentially increased enforcement powers for the ICO on the horizon and continued oversight of firms' cyber resilience by the PRA.
Awareness of ESG requirements which had been steadily gaining momentum over the past couple of years was thrust firmly into the spotlight in 2021, culminating in a stark wake-up call following COP26. Businesses are engaged with a huge challenge: engineering the wholesale redesign of business and society to tackle climate change, embedding sustainability and building greater social and economic equity for future generations. For those agile and able enough to adapt, the opportunities here are significant.
Whilst our own research shows that consumers of insurance are largely unaware of the role regulators play, striking the right balance between regulation and competitiveness is key for the industry itself. 2021 saw insurance regulators responding to the challenges of COVID-19 as well as pursuing new consumer-focused measures designed to put customer value at the heart of the retail insurance markets. 2022 in the UK will see the whole of the insurance regulatory landscape come under the microscope from various initiatives, including the review of the Solvency 2 regime, the Future Regulatory Framework and in Lloyd's the implementation of Blueprints 1 and 2.
Notwithstanding the desire to move forward, it should not be forgotten that COVID-19 remains a live issue. The rapid onset and spread of different variants underlines ongoing uncertainty and highlights the continued need for resilience and agility, a need that has been recognised by the FCA's operational resilience regime coming into force at the end of March.
Our contributing authors delve into these issues and more in the report and we hope that you find their insight both helpful and useful to the decisions you have to make in your own business. More importantly, we will continue to support you with existing challenges and help you prepare for those emerging. If you wish to get in touch with either any of our experts, please do and we will be delighted to assist.
As part of our wider InsureInsight programme, we provide market updates, webinars, round-tables and in-person events, covering the breadth and depth of non-claims commercial issues affecting insurers. To sign up to our next events, please click here.