The reinsurance industry risks falling behind if it does not more actively embrace emerging technologies like artificial intelligence, according to Tanya Beattie, an actuary with financial services firm Grant Thornton in Bermuda.
Speaking at the [Re]Connect reinsurance conference in Grand Cayman, Beattie said the sector had been “slow to adopt new technology and AI” and warned that firms that failed to adapt could lose ground.
She told delegates that not engaging with technology posed greater risks than the potential challenges associated with its use.
According to a report from the Cayman Compass, Beattie said a more technology-driven approach to data analytics could lead to “greater efficiencies within the business” and noted that many within the sector believe “the present systems are no longer fit for purpose.”
She also pointed out that legacy systems remain widespread across reinsurance firms and are often poorly integrated with newer data-driven solutions.
The panel also included Veronika Torarp, a partner at PwC; Mark Yu, head of enterprise capital strategy at New England Asset Management; and Tim Zawacki, principal research analyst at S&P Global Market Intelligence.
Beattie noted that the industry's slow progress may partly stem from past investments in technology systems that failed to meet expectations.
She also said “AI literacy is still quite low,” commenting that for many in the sector, using ChatGPT might represent the full extent of their engagement with AI tools.
Environmental considerations must also be factored into decisions about AI adoption, Beattie said, highlighting the electricity consumption, waste generation, and water use associated with data centers that support AI systems.
Making Beattie’s comments more relevant is a recent report from RGA, in which the reinsurer highlights the importance of addressing the environmental impact of AI operations.
GenAI tools, while offering productivity and operational efficiencies, require significant computing resources, which in turn increase energy consumption and carbon emissions.
One of the primary methods to mitigate these effects is optimizing infrastructure. RGA notes that shifting GenAI workloads to hyperscale cloud providers with energy-efficient data centers can lower emissions.
Beattie said it is “safe to say AI is part of the future of the industry” but stressed that appropriate “guard rails” need to be in place, with human oversight remaining a critical element.
Beattie advised companies to adopt a gradual approach to technology, starting small and building trust in the systems before expanding their use.
She said that while technology can support many back-office functions and “free people to do other things,” it is essential to maintain human expertise, particularly in underwriting. “The need to keep the human in the loop, that’s very important,” Beattie said, adding that technology should support, but not replace, underwriting experience.
Following the panel, Beattie described the industry's current attitude toward technology adoption as “cautious acceptance.”
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