There is some validity to the bad press the (re)insurance market has received regarding its take-up of technology, Igor Best-Devereux, chief executive of eReinsure told The Insurer.
“It’s a business which has underinvested in technology,” he said. “But I think it’s great to see now the focus turning to how technology can help.”
Best-Devereux told The Insurer during this year’s Monte Carlo Rendez-Vous that, “Today, technology is absolutely core to reinsurance business and unless a company is using it, it won’t be able to be competitive.”
However, (re)insurance business unlike the global payments business, for example, has quite complex data requirements.
“It’s not possible to describe these risks in five data elements. We certainly need information and data standards, but compared to many other financial services, reinsurance is complex business and the risks are often very different from one another and to describe those in terms of data is often difficult,” he said about the predicament of implementing technology.
On the subject of efficiency and the shape of the market regarding technology-driven efficiency today, compared to the status quo five years ago, Best-Devereux said, “When you talk about efficiency now and five years ago, it’s a bit difficult to be sure how exactly things have changed as we don’t have great measures.
“But we’re swimming against the tide as efficiency is definitely impacted by regulation, but also the complexity in general in business,” he added.
Best-Devereux listed FATCA, GDPR and IFRS as regulation which is being loaded onto (re)insurance.
“I think that it’s hard to tell how far the market has come in terms of efficiency, but the good news is that companies are trying to do more than ever to try and address this topic in this business,” he said.
According to Best-Devereux, cost continues to be a big factor towards driving efficiencies and interest from senior management. “We’re going hear a lot about this topic this week during the conference,” said Best-Devereux, talking about the impact of cost. “What is the cost to the business and how do we get it down and how do we improve efficiency?”
On the subject of new business start-ups on the broking and underwriting side, and the need for these to be ‘tech savvy’, Best-Devereux made the point that it would be “odd” for new start-ups not to be tech-savvy.
“Technology and start-ups go together, but I think it’s true to say that for any company these days in this business, the customer expectation is one of efficiency in operations, quality, particularly in the area of data, and it’s going to be one of accuracy,” he said.
“These requirements that our customers want can’t be achieved without the use of technology. Start-ups are going to have to be tech savvy and they’re going to have to use technology to keep their costs under control and to provide the services they’re promising to provide. That’s going to be true of the old companies as well as the new ones,” he said.