A panel of industry experts discussed the role of regional and global re/insurance hubs and the conditions necessary for them to thrive. In association with the Dubai International Financial Centre Authority
The growing significance of insurtech could be a deciding factor in which hubs take over as the major centres for doing re/insurance business in the future.
This was one of several points debated by a panel of top industry figures at a GR executive roundtable sponsored by the Dubai International Financial Centre Authority (DIFC) held yesterday in Monte Carlo.
Opening proceedings, DIFC chief executive Arif Amiri said that 2017 had been a great year for the area, which saw the centre grow to 110 insurance and reinsurance companies, dealing $2bn in premium.
Amiri emphasised that the DIFC’s work around embracing insurtech was a key part of this.
He said: “We are passionate about technology and about fintech within the DIFC, and I believe that technology is something we really need to invest in.
“Within the DIFC itself we have launched a fintech accelerator and within the second quarter we have a whole conference dedicated to propelling the industry forward into insurtech.”
Whether technology and the ease of doing business electronically was a threat to traditional hubs for doing business, and even annual conferences like the ongoing Monte Carlo Rendez-Vous, was a point discussed by the panel.
Most agreed that there would always be a need for some kind of face-to-face discussion.
Robert Muir Wood, chief research officer for risk modelling firm RMS, said: “You could easily replace most of what we do with algorithms, except the insurance product is actually written on very light wordings.
“These light wordings require a huge amount of trust, and I think how you gain trust is through personal contact – you have to be able to look someone in the eye and shake their hand to gage their perspective.
“That is a key function of the insurance product which cannot be replaced with algorithms.”
Looking to which hubs would grow in the future, Swiss Re’s chief economist Jerome Haegeli said it would be those that make integration of new technology and innovation easiest.
He said: “It is important that you allow for an environment which makes it easy for new technology to flow.
“Looking ahead I do think there will be centres, but these will be centres that marry a lot of different factors, including technological ease.”
Brendan Plessis, XL Catlin’s head of emerging markets, said that growing hubs like Dubai, Singapore, Bermuda and Miami had seen growth thanks to regulators that allow for ease of doing business.
He said it was “no coincidence” that these locations had seen also a subsequent increase in insurtech innovation.
He added: “It’s not an accident that you are seeing a hotbed of insurtech development in these hubs.
“It’s happening and it’s their time. The question we need to ask is what can we do to empower that and give them the opportunity to lead their legacies.”