Auteur : Franck Roessig
Digital Trust Solutions


Life Insurers are targeted by Money Laundering & Fraud as a recent survey shows that roughly 2/3 of the insurance industry has been impacted. Indeed, criminals are using sophisticated tactics to succeed in this segment representing EUR 764BN in premiums in Europe.

Anti-Money Laundering (AML) / Counter Terrorist Financing (CTF) regulations are increasingly stringent. Supervisory authorities, notably EIPOA, FATF, ESA, EBA as well as domestic bodies, publish a wide array of texts in reference to KYC activities. The newly created AML Authority (AMLA) to coordinate national supervisory authorities (NSAs) adds a layer to the supervision. Further, PRIIPS requires a clear classification of a client’s investment profile in order to ensure only suitable and appropriate investments are included into a life-insurance .

Life Insurers must therefore warrant compliance with increasingly cumbersome regulation or face the risk of regulatory fines, legal liability in civil and criminal courts and reputational damages.

At the same time, life-insurers should enable a smooth client experience by building on a productive operation.

Regulators are requiring Life Insures to take a Risk Based Approach (RBA) in profiling clients and transactions. This entails a questionnaire through which risks on person, products and the distribution are scored.

Indeed, Life Insurance is still widely distributed through networks of intermediaries. KYC therefore implies enabling the intermediary engaged with the client to collect relevant KYC information in a complete, efficient and usable manner. The easier and more efficient the KYC-tool given to intermediaries is, the better the quality of the collected information is. In fact, an easy-to-use KYC platform is even a competitive advantage as intermediaries prefer to work with life insurers that enable a fluid interaction with clients. This is important as the AML/CTF responsibility cannot be delegated. While intermediaries, whether Bank-Insurance networks, agents or brokers, still represent the biggest distribution channel, digital distribution channels emerge like InsurTechs, online insurance marketing platforms and comparison sites. Accordingly, some intermediaries are boosting their online distribution. These new digital channels are considered by regulators to be a source of new risks and therefore increased scrutiny. While life insurers mitigate these new risks, an online onboarding platform actually represents the opportunity to improve security through the introduction of digital analytics tools that are better at detecting suspicious onboardings and at the same time are faster. These entail digital ID-Document verification that analyzes hundreds of data points in seconds, facial biometrics that validates it is the same person than on the ID-Document, Mobile number scoring device takeover detection, email plus address verification and many more.

Multiple persons are involved in a life insurance contract: The person paying the insurance, the insurance holder as well as the beneficiary or beneficiaries. Moreover, those may change over time. All these must be verified either at inception or when there is an event. Here digital verification workflows, whether used on a tabled in presence of a counterpart or conveniently online are essential in view to comply in an effective manner,

Product wise, certain features, like single premium policies or annuity policies, refunding, possibility for withdrawals/top-ups, transferability and policy loans can be a source of heightened risk. Indeed, significant amounts of money can flow under certain policies that must therefore be flagged accordingly.

All the information gathered during the onboarding due diligence and the subsequent monitoring and events management must be available in centralized and clear manner to the compliance team. This is the only way that the compliance function can take decisions that are informed and at the same time swift to ensure a fast response to client needs. A digitalized KYC orchestration platform serves exactly that purpose by enabling collaborative workflows between different insurance departments and the intermediaries. The results are visible in an overview showing the completeness of information and documents collected, the results of due diligence analytics as well as risk scores.

This is exactly what DigitalKYC does, enable automated collection of relevant data that is analyzed and aggregated in a manner to enable informed and auditable compliance management…

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