How reinsurers can spark profitable growth through advanced connectivity
EY’s Sophia Yen and David Connolly highlight the need for a technology upgrade in the race to the top…
There is a significant growth opportunity for reinsurers that can deliver a fully connected value exchange that replaces the mostly manual processes we’ve all suffered with for decades.
Integrated platforms will directly connect market stakeholders for real-time data sharing and more fluid collaboration to develop solutions customers want, including capital allocations, risk triggers for provisional notices of cancellation and loss prevention services. Such platforms will also enable the sharing of risk insights during the underwriting year (rather than in hindsight) and coverages that better reflect the nature of their assets
As critical members of the overall value chain, reinsurers have catalysed the growth of the global insurance industry. Proper and appropriate reinsurance enables cedants to write more profitable business, take greater lines in longer-tail products and lines of business, and ultimately fulfil our noble purpose to protect and support the evolution of society.
Digital experiences and tools can streamline not only purchasing but also the risk management process with easier data sharing and increased transparency on coverages and risk performance. Instead of traditional trading practices, modern tech can provide clear, end-to-end visibility from quoting to binding to claims and through reserve analysis and portfolio management.
“Future market leaders won’t pit people against machines, but rather create hybrid models with talented professionals empowered with powerful technology”
Whether you choose to vertically integrate or participate on a platform or adopt a hybrid model to support different lines of business, reinsurers have more freedom to innovate with more diversified offerings, including primary insurance products and risk management guidance.
Their ability to match new products to different risk appetites will open access to secondary markets and allow reinsurers to engage more stakeholders profitably. They will take the lead in designing coverages for the unthinkable, such as future pandemics, “cybergeddon” events and climate catastrophes.
Reinsurers that want to lead in our evolving industry will need to upgrade their technology platforms to enable seamless and transparent plug-and-play connections for clients, brokers and other service providers. Strong, effective micro services to enable rapid integrations will be key. The benefits – more accurate pricing, more appropriate coverages for cedants, more efficient sales and servicing processes – will more than justify the effort and investent.
Reinsurers need to recruit new talent as the current workforce retires. Data scientists and actuaries will use advanced data and analytics to optimise cedant exposure and accumulations. Future market leaders won’t pit people against machines, but rather create hybrid models with talented professionals empowered with powerful technology. In other words, it’s a race to the top, which means reinsurers need a plan.
For more on how reinsurers can spark growth through advanced connectivity, please contact us.
Sophia Yen is EY Americas insurance strategy and innovation leader and David Connolly is EY global nexus for insurance leader