Internal Controls and Insurance in Industry 5.0
Zuzana Brokešová, Tomáš Ondruška · 2025
Abstract Purpose: To systematically identify and critically analyse the challenges and opportunities for the development of internal controls in the insurance industry within the new technological revolution Industry 5.0. Need for the study: Effective internal controls are essential for maintaining financial integrity, protecting policyholder interests and complying with regulatory requirements. Covering risk, the insurance industry helps to protect companies and households from financial losses resulting from adverse situations. Financial stability of these institutions is crucial for financial well-being of society, reinforced in the current period of technological revolution Industry 5.0. Methodology: Detailed review of current literature and existing practices regarding traditional internal controls in the insurance industry including the framework analysis for further development related to a technological shift. We also use the impact analysis of Industry 5.0 characterised by the integration of novel technologies and cyber–physical systems that alters the landscape for internal controls. Findings: The impact of Industry 5.0 on the insurance industry can be summarised in three areas: (1) changes in risk leading to changes in demand for insurance, (2) changes in internal processes and (3) changes in competition in the insurance industry. While insurance companies are complex institutions, developments in all these areas are closely linked to business success. We conclude that this technological shift could help insurers to reduce costs associated with previously manual and repetitive activities. Practical implications: Adaptation of internal controls in insurance industry by technological innovations in Industry 5.0 could increase the transparency of financial integrity, following the increase in the protection of policyholders’ interests.