How insurance GCCs in India are redefining risk management and compliance standards⁠

Global capability centres (GCCs) in the insurance sector in India are experiencing unprecedented growth and transformation, reshaping how risk management and compliance standards are implemented across the industry. 

According to a NASSCOM report, insurance GCCs in India have grown by 15% over the past three years, exhibiting a notable increase in leveraging advanced technologies like artificial intelligence (AI) and data analytics to optimise their operations. These centres are enhancing risk management frameworks and setting new compliance standards to ensure operational resilience, financial integrity, and regulatory adherence.

Technology for resilient risk management

The evolution of risk management within insurance GCCs has been particularly noteworthy in how they handle operations. Modern resiliency frameworks now incorporate detailed mapping of process ownership, criticality assessments, and contingency strategies across different operational units. This systematic approach ensures that critical functions maintain continuity even during unpredictable disruptions, with process owners, whether in India or abroad, collaborating with greater ease and transparency to enhance crisis management capabilities.

A notable example in this transformation is the development of resiliency dashboards that serve as a comprehensive mapping system, identifying process owners, assessing criticality, and outlining recovery strategies. Risk management in insurance GCCs now involves deep process segmentation, categorising work into technology dependency, back-office processing, chat, and voice-based operations. While technology and back-office processes are relatively stable, voice and chat services are highly critical due to their real-time nature. By identifying critical touchpoints, GCCs ensure that operational risks are mitigated effectively. 

Insurance GCCs in India play a crucial role in ensuring compliance with regulatory requirements, particularly in highly regulated markets. By maintaining rigorous adherence to these standards, GCCs contribute to seamless operations and robust financial governance.

How COVID-19 led to building resilience

The COVID-19 pandemic served as a defining moment for risk management functions within BFSI (banking, financial services, and insurance) GCCs in India. The crisis underscored the need for a robust resiliency framework and a proactive crisis management strategy. During the pandemic, insurance GCCs rapidly adapted by implementing enhanced cyber resiliency measures, control testing, and business continuity planning. 

One of the most significant learnings was the importance of distributed risk management. For instance, the GCCs recognised that centralising 80–90% of resources and business processes in one location posed a substantial risk. Consequently, efforts were made to distribute responsibilities across geographies, ensuring that critical operations remained unaffected in the event of localised disruptions. Additionally, data-driven insights and enhanced reporting mechanisms were introduced to monitor resiliency metrics, enabling proactive risk mitigation.

Strengthening operations and workforce risk management

As an industry, we face different types of risks, including strategic, investment, financial, operational, and workforce-related risks. For insurance GCCs in India, the primary focus has been on operational and workforce-related risks, which have a direct impact on both business resilience and customer satisfaction. 

Operational risk management has expanded to include cyber security, control testing, technology integrations, fraud prevention, regulatory compliance, and third-party risk management. On the other hand, workforce-related risk management focuses on attracting and retaining top talent. High employee turnover, lack of engagement initiatives, and limited growth opportunities pose significant risks to GCCs in this area.

Way forward

As the integration between GCCs and their parent organisations continues to deepen, these centres are being viewed as integral parts of the global organisation rather than distant operational units. This integration is particularly evident in the BFSI sector, where GCCs are driving innovation in risk-shared services and creating new opportunities for growth and stability. 

The transformation of insurance GCCs in India represents a significant shift in how the industry approaches risk management and compliance. By combining technological innovation with robust risk management frameworks and a strong focus on talent management, these GCCs in India are setting new standards for the industry globally. 

The author is Director – Risk, Compliance & Governance, Allstate India.