When insurance company audit committee members look back at the events of 2020—the outbreak of COVID-19 and the resulting recession, extreme weather events and wildfires, deep-seated social unrest, and an increasingly polarized America—they’ll remember a daunting and opaque business and risk environment. While recent developments give rise to hope relating to treatment of COVID—19 and the resulting possible economic recovery, the overall business environment in 2021 will may very well still be daunting.
Even with the recent encouraging COVID treatment developments, dissipation of global economic volatility is far from certain, driven by trade and geopolitical tensions, resurging debt, technology and business model disruption, elevated cyber risk, regulatory scrutiny, and political gridlock in the U.S. and elsewhere.
Given the prominence of those risk vectors, prioritizing an expected heavy audit committee agenda in the insurance industry will be particularly important.
On Insurers’ Audit Committee Agenda in 2021
Drawing on insights from the KPMG Board Leadership Center/KPMG Audit Committee Institute latest survey work from across industries and interactions with audit committees and business leaders, our latest report On insurers’ Audit Committee Agenda in 2021, highlights what we expect will be the key issues for insurance company audit committees to keep in mind as they carry out their 2021 agendas.
Indeed, we expect many boards of insurers will see 2020-21 as a turning point in critical areas:
- Corporate governance, with demands for greater attention to corporate purpose and stakeholder views
- Corporate culture and incentives, diversity and inclusion
- The richness of boardroom dialogue and debate
- And, the company’s (and board’s) readiness for the risks and opportunities ahead—some of which may be backed up by investor votes against directors.