Are insurers across the region sitting on significant reinsurance recoveries they have never claimed?
Christian Erickson, managing director for APAC at Duck Creek Technologies (pictured), believes many are, and that most only find out after they start using a modern reinsurance management platform.
In markets like Singapore, Thailand, Malaysia and the Philippines, this scenario may be more common than the industry appreciates.
"Duck Creek's customers that retrospectively reviewed their reinsurance activities using their new reinsurance management solution identified significant volumes of missed recoveries that they had been able to claim," said Erickson. "They could have missed out on many millions of dollars of recoveries per year, for many years to come."
The problem, Erickson argued, is not that reinsurance itself has changed all that much. The core mechanics of ceded reinsurance administration, including contract types and structures, remain largely stable. What has shifted is everything around it.
"Up until a few years ago, insurers had reported that their legacy approaches to reinsurance management, including spreadsheets, had been suitable," he said. "But recently, Southeast Asia's insurance market has undergone significant change with more pressure placed on ceding insurers, so these legacy methods are no longer fit for purpose."
The bonus is that the implementation cost of the new systems these insurers purchased from Duck Creek are offset almost immediately.
For Southeast Asia's non-life insurers, the question is no longer whether legacy reinsurance management methods are adequate. It is how much they have already cost.
Southeast Asia's insurance markets are not uniform, and Erickson is careful to distinguish between them. Singapore faces a different set of pressures than its neighbours to the north and west.
"Singapore's insurers are strongly connected to international reinsurance markets, such as Lloyd's," he said. "New reinsurance technology, giving insurers more access to new data and insights, and offering improved processes, could allow them to unlock and extract more value than they otherwise would have from their existing programme."
Duck Creek's reinsurance solution integrates into Lloyd's Outwards Reinsurance Scheme, which Erickson said could allow Singapore's specialty insurers to directly connect to and interact with the Lloyd's technology platform.
Thailand and Malaysia present a different picture. Both are growing markets with both recently exposed to catastrophe events, a pattern that shows little sign of reversing.
"Legacy methods have been preventing Malaysian and Thai insurers from accessing the most favourable reinsurance contracts or maximising claims recoveries," Erickson explained, "and this is contributing to tighter risk selection, higher premiums, and ultimately poorer customer outcomes."
Malaysia, in particular, is in the middle of a significant regulatory transition. Bank Negara Malaysia is pushing for greater market penetration and modernising the sector through the removal of tariffs and the strengthening of international standards under MFRS 17 and RBC 2. Ceded reinsurance sits directly in the path of these changes, supporting capital management while finance teams work to meet new reporting and accounting requirements.
"These modern solutions give finance and management teams a single, transparent and accountable view of contracts, exposures, partners and financial impact," Erickson said, "highlighting opportunities for better capital management and generating standardised reports that satisfy global regulatory requirements."
There is a tendency in insurance technology discussions to treat "modernisation" as a broad and somewhat abstract ambition. Erickson pushed back on that framing, outlining a fairly specific set of capabilities he considers non-negotiable for any platform sold to a serious regional insurer today.
The ability to handle every contract structure across different lines of business, account types and currencies, he said, should be considered baseline. What separates a genuinely modern solution is the intelligence built on top of that foundation. He described the requirements this way:
"Data shouldn't be spread over disparate spreadsheets and need to be manually reconciled," Erickson said. "Modern systems give insurers insights into their claims, exposure and capacity, and standardise and format this information to suit different requirements, and for different stakeholders."
He also emphasised the user experience dimension, which sometimes gets lost in technical specification discussions. "From the user's perspective, functionality and capability should all be in the one place," he said. "Workflows should be intuitive and contracts easy to access, view, interpret and manage."
AI has arrived in the reinsurance conversation whether insurers are ready for it or not. But Erickson points out that most of the AI activity he is currently observing in the region is being layered on top of precisely the legacy systems it should be replacing.
"What we're beginning to see is institutions applying AI tools to legacy methods," he said. "Doing so may give them short-term benefits, but this adds long-term complexity, costs and limitations."
The diagnosis he offered was pointed. When AI is applied to a fundamentally flawed system, it does not fix the flaws - it embeds them.
"The inherent flaws of the legacy solution get locked in and AI acts as a band aid," Erickson said. "The AI also adds a layer of technological and functional complexity, another layer that can fail. By not replacing legacy solutions, insurers are not obtaining the maximum long-term value of a modernisation programme."
For insurers already on modern platforms, by contrast, AI opens up genuinely useful applications. Erickson pointed to use cases including deeper insights to maximise recoverables, stronger contract negotiation support, capital unlocking and improved rates.
"But with many insurers still using antiquated legacy reinsurance management methods," he added, "the biggest push is to get them on to modern reinsurance management solutions, from which they can achieve almost immediate ROI and then build an AI strategy to drive further business value."
If the value proposition for modernisation is this clear, why are so many Southeast Asian insurers still running reinsurance on spreadsheets? Erickson's answer pointed to a structural problem in how reinsurance tends to be viewed within an insurer's technology roadmap.
Two triggers typically prompt a review: either the insurer is already modernising its core policy, underwriting or claims management platform and reinsurance gets pulled along with it; or external regulatory and financial pressures become severe enough to force the issue. The second scenario, he said, is currently playing out across Southeast Asia's non-life market.
"Outside of these, they traditionally view their legacy reinsurance management processes to be working adequately, so there's no impetus to improve," Erickson said.
That assessment, he argued, tends not to survive scrutiny. Reinsurance, managed well, is not simply a risk mitigation cost. It is a source of competitive advantage that flows through to policyholders in the form of better value and broader coverage. Insurers who demonstrate they can manage their business better can benefit from sharper reinsurance rates and increased capacity.”
"An insurer could recover more, run faster and decide better," he said, "and this will flow through to their policyholder through more value and coverage."
The contrast with other regions is pointed. European, North American and Australian insurers have invested heavily in modern reinsurance management platforms. Duck Creek's clients in those markets include QBE, AXA and Generali, insurers operating across some of the most heavily regulated insurance markets in the world. Southeast Asia, Erickson said, has been largely absent from that wave of investment, in part because suitable modern solutions have simply not been available in the market until recently.
"As far as we have assessed, there aren't many Southeast Asian insurers using truly modern reinsurance management platforms," he said. "The majority of solutions we know are available in Southeast Asia all fall into the legacy category, and those that do not are building on top of a legacy foundation."
The problem is only going to get bigger and more visible.
"The limitations of legacy methods are going to become even more obvious in the future, with the increasing adoption of AI throughout insurance delivery," Erickson said. "Reinsurance is no longer just about mitigating an insurer's risk. Regulatory, customer, economic, operational, structural and trade factors are driving the need for more comprehensive, capable and intelligent reinsurance management methods."
This article was produced in partnership with Duck Creek Technologies
