Times may be uncertain, but reinsurers must continue to invest in both quick wins and longer term transformation projects
The challenging headwinds the reinsurance industry is facing is not reason enough to abandon transformation and digisation journeys. The risk of too much hesitation is that players will become irrelevant.
This is according to Isabelle Clausner, vice president, client executive, Southern Europe at Xceedance and Justin Davies, SVP, head of region, EMEA, at Xceedance.
Speaking to Global Reinsurance at the Rendez-Vous de Septembre in Monte Carlo, they said companies should be looking for both quick wins and executing on longer-term objectives.
Partnering with technology providers that understand the insurance and reinsurance market and its goals is critical to success. That lack of knowledge is a common reason why projects fail.
”It’s very challenging to make decisions both short term and medium term, but you don’t want to miss the boat of longer term transformation,” said Clausner. ”You’ve got to hold onto some of those crticial investments and think about what will the industry look like in 2030. Those who miss the boat, how relevant will they be?”
The industry has a plethora of data that can be used to better underwrite and price the risk, but accessing this data on legacy systems remains highly problematic.
”It is a big challenge,” noted Davies. ”Insurers still have multiple policy administration systems and so there is no single source of truth and they are struggling to join that data up - it’s such a hard thing to do.”
Meanwhile, insurtechs have not necessary achieved the results they were expecting and too much investment to date has gone on bringing efficiencies to distribution, rather than innovating in other areas.
“Did the insurtechs get their models right?” asks Clausner.
Referring specifically to Lloyd’s transformation initiatives, Davies suggested the market was still behind on where it needs to get to and thought that focusing on a few “quick wins” would be an obvious place to start.
Traditionally considered a digital laggard, the industry accelerated its adoption of technology during the pandemic, in particular embracing cloud technology.
However, there is a long way to go, said Davies, and the threat of disruption does not go away.
“Google and Amazon could do a fantastic job with technology that is all about the ability to coral data effectively. But do they want the regulatory oversight that comes with operating in insurance? My feeling is they don’t. But the threat of disruption from these guys is always there, and you can’t get complacent.”
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Don’t miss the transformation boat - Xceedance