A research project on outsourcing in the Maltese insurance industry by Sebastian Kittel, general manager of Collinson Insurance Europe Ltd, has developed recommendations on governance and risk management systems and the findings of the project could be of benefit to the industry in the future.
The research, which formed part of his dissertation for an MBA programme of the University of Chester, analysed the legal and regulatory framework, and the relationship between insurers and insurance managers based on relevant management theories.
Malta has evolved into a successful European insurance hub and one of the key factors for this success includes the established industry of insurance management companies which perform outsourced functions on behalf of insurers. Legislation and regulations both on a European and Maltese level set high requirements on systems of governance and risk management systems, and this led to challenges concerning outsourced functions.
Kittel conducted surveys on the extent, value and sustainability of outsourcing cooperation models in the local insurance market and drew up recommendations for firms that outsource functions to insurance managers, for their governance to ensure robust oversight. These include considerations for board structures and committees, clear responsibilities and policies, robust controls and Key Risk Indicators; devoting appropriate resources to suitable monitoring, management and on-site inspection of outsourced activities; retaining in-house skills for the oversight of outsourcing arrangements and repatriation or substitution of services, if required; and business continuity management and exit strategies.
This research project also challenged the cost efficiency of effective governance and risk management systems for outsourced functions.
The degree was carried out following the award of an ‘Endeavour’ scholarship and the research was partially funded by the Endeavour Scholarship Scheme (Malta). These scholarships are part-financed by the EU’s European Social Fund (ESF), Operational Programme II, Cohesion Policy 2014-2020 ‘Investing in human capital to create more opportunities and promote the well-being of society’.
Independent journalism costs money. Support Times of Malta for the price of a coffee.Support Us