Thriving amidst regulatory complexity
In the face of rapidly advancing digital technologies and an increasing focus on Environmental, Social, and Governance (ESG) factors, insurers are faced with the challenge of staying ahead of an ever-evolving regulatory landscape.
The pressures of regulatory compliance, technological advancements, and the need to align with global ESG standards are reshaping the insurance industry. To understand how insurers can successfully navigate these complexities, FAnews spoke to Thabile Nyaba, Chief Risk Officer, and Lerato Bacela, Financial Director at Old Mutual Insure, about the evolving landscape and how the company is positioning itself for the future.
Regulatory demands in a digital and ESG-driven world
The regulatory environment for insurers has become significantly more complex as digitisation accelerates and ESG concerns become more central to business strategies. The rapid rise of digital technologies has raised new regulatory issues around data privacy, cybersecurity, and operational resilience.
Meanwhile, insurers are also under growing pressure to integrate ESG principles into their business models, particularly in light of increasing consumer demand for responsible business practices.
Nyaba explains that the impact of these trends on the regulatory landscape has been profound. “The growth of digital technology has forced regulators to focus on areas like data privacy and cybersecurity,” she says. “At the same time, ESG factors have become a key area of focus, especially in light of South Africa’s socio-economic and environmental challenges. Insurers must be increasingly conscious of how their operations impact the environment, society, and governance structures.”
However, as Thabile notes, the integration of these new regulatory demands presents challenges, particularly for smaller insurers. “The costs associated with upgrading digital infrastructure and ensuring data privacy can be significant,” she adds. “And on top of that, there is a growing skills gap in both digital and ESG expertise, which makes it even harder to keep up with these requirements.”
The role of technology in regulatory compliance
To meet these new demands, many insurers are turning to technology to streamline compliance processes and enhance operational efficiency. Nyaba points to the increasing importance of regulatory technology (RegTech) as a solution to managing the evolving regulatory burden. “RegTech tools help insurers track regulatory changes, automate compliance checks, and maintain audit trails, reducing the manual effort required,” she explains. “AI is also playing a bigger role, allowing insurers to process large amounts of data more efficiently and automate time-consuming tasks.”
At Old Mutual Insure, the Compliance Digital Team has been working on multiple projects that use data analytics, robotics, and policy management tools to ensure that the company stays compliant while also improving customer experience. Nyaba says, “By leveraging digital solutions, we’re able to meet regulatory demands and create a better experience for our customers simultaneously.”
Integrating ESG into compliance frameworks
As ESG factors become increasingly integral to regulatory requirements, insurers must ensure that these considerations are embedded into their compliance frameworks. Nyaba emphasises that South African insurers should align their corporate governance policies with global ESG principles, such as the United Nations Principles for Sustainable Insurance. “This includes setting clear, measurable goals around environmental impact, social responsibility, and governance,” she says. “It’s also crucial for insurers to stay proactive and scan the external environment for emerging ESG risks and opportunities.”
Bacela notes that the company has made significant strides in integrating ESG considerations into its operations. “We’ve heavily invested in advanced data analytics tools to enhance our ability to assess and report on ESG risks,” she says. “This allows us to stay ahead of regulatory changes and ensure that we remain compliant with both local and international standards.”
Preparing for future regulatory changes
Looking ahead, the regulatory landscape is expected to become even more demanding, particularly as global regulators push for more standardised ESG and climate risk disclosures. Bacela points to the introduction of IFRS 17, an accounting standard that came into effect in 2023, as one of the key changes impacting insurers. “IFRS 17 aims to provide more consistent reporting across the insurance industry, making financial statements more comparable and transparent,” she says. “This is just one example of the global trend towards more detailed ESG and climate-related disclosures.”
Bacela adds that the lessons learned during the transition to IFRS 17 will be invaluable as the company prepares for future regulatory changes. “As we move forward, we will apply the insights gained from IFRS 17 to other regulatory challenges, particularly as climate risk disclosures become more important,” she explains.
In addition to global standards, Nyaba highlights upcoming regulatory changes in South Africa. “By 2026, we are expecting the introduction of a comprehensive regulatory framework for digital insurance and insurtech. Insurers need to be proactive in adapting to these changes by investing in technology and preparing their risk management strategies well in advance.”
Collaboration and industry partnerships
In navigating the complex regulatory landscape, industry collaboration will be key. Nyaba emphasises that partnerships with industry bodies, regulatory technology providers, and other insurers can help to share the burden of compliance and enhance industry-wide practices. “Collaborating with organisations like the South African Insurance Association (SAIA) and the Association for Savings and Investment South Africa (ASISA) ensures that we stay informed about emerging regulatory trends and can share best practices,” she says.
One example of collaboration in action is the partnership between Old Mutual Insure, Santam, and Hollard to address fire risks in high-risk areas of South Africa. “These kinds of collaborations allow us to tackle shared challenges, such as the growing risk of large fire claims, while ensuring that we remain compliant with emerging regulations,” Nyaba explains.
Long-term success in a changing regulatory environment
As regulatory requirements continue to evolve, insurers must be flexible and forward-thinking. Nyaba advises that compliance should be integrated into an insurer’s culture and everyday operations, rather than seen as a separate or burdensome function. “Compliance is not just about meeting regulatory requirements - it’s about creating a resilient, sustainable business model that can thrive in a changing environment,” she says.
Bacela echoes this sentiment, stressing the importance of continuous improvement. “At Old Mutual Insure, for example, we’re committed to optimising our processes, whether that’s through better reporting tools, enhanced risk assessments, or ongoing staff training. This enables us to stay ahead of regulatory changes and position ourselves for future success.”
Writer’s Thoughts
In a world where compliance, ESG, and technology increasingly intersect, insurers must evolve from reactive regulators to proactive architects of resilience. Future success won't come from ticking boxes, it will come from building businesses that are transparent, agile, and ethically grounded. Do you agree? Please comment below, interact with us on X at @fanews_online or email me your thoughts at [email protected].
