Spotlight Report - Insurance sector

AML and KYC Vulnerabilities

An in-depth look into the issue to help you to identify weaknesses in your existing compliance framework.

The insurance sector has a money laundering problem. While insurers might assume money launderers are more focused on other parts of the financial services industry – most obviously, banks – the facts tell a very different story. Almost two-thirds of insurers had been exposed to fraud or financial crime.

As businesses that sell policies, rather than managing a continuous flow of financial transactions, they may appear to be a less obvious target for money laundering. But the reality is that huge sums flow into and out of insurance contracts, which are often complex and may involve a significant investment element. The sector is therefore a tempting target for financial criminals.

KYC and AML are powerful complements to each other and important elements for Insurers looking to protect themselves against fraud and financial crime. Both involve verifying the identity and legitimacy of individuals and organisations through rigorous checks. In itself, that makes it harder for criminals to operate. In addition, AML checks help to uncover the money trail, understanding where money comes from and how it’s spent so that organisations can ensure it’s not laundered through them.

In this industry report, we examine:

  • Where insurers may be vulnerable to AML risk
  • The regulatory environment
  • How to ensure compliance with AML regulation
  • How automation can help

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