How can you get an accurate reading of the challenges and concerns impacting re/insurance clients in an increasingly volatile risk environment? This was the challenge ReInsurance Business looked to address at the Bermuda Risk Summit, where the publication asked industry leaders from across reinsurers, brokerages and associations to shine a spotlight on what’s worrying their clients and partners today.
Sharing his perspective, Patrick Abbe, regional and mutual strategic growth leader at Aon, said that clients are expressing concerns about the successful implementation of the IT projects they’re currently undertaking.
“US insurers in large part are operating on older, outdated systems that are challenging to upkeep and have actually presented a real challenge for them in terms of keeping up with the market demands around product evolution and pricing evolution in underwriting,” Abbe said.
“This has been a challenge for companies over the past five to 10 years, and every company is at a little bit of a different spot within their life cycle. But part of what happened over the past few years, when the market hardened very rapidly, is companies that did not have updated IT infrastructure found themselves a little bit exposed when there came a need to evolve their products around deductibles and coverage, forms and pricing.”
As a result, companies that were operating on an outdated system had a much more difficult time moving as quickly as they needed to, as the market moved into harder conditions, he said. So, there is concern among these companies around their ability to successfully implement large-scale IT projects on-time and on-budget.
For Aidan O’Neill, CEO and founder of DOCOsoft – which works with some 20 carriers in the London and Bermuda markets – clients are looking to avoid the fear-of-missing-out (FOMO) effect. The boards of the insurance companies are afraid of missing the AI boat, he said, and so they’re directing their heads of claims and underwriting to make a push to implement AI.
“In the London market, we’re doing some proofs of concept with some carriers at the moment in terms of AI but, from our perspective, the data has to be right,” he said. “The second thing we’re seeing among clients is also coming back to data, and it’s Blueprint 2 and how it’s changing the plumbing of the 40-year old legacy systems with new cloud-based digitization systems.
“By getting [the data models] right, you're building the foundation for AI in the future. We also see pressure on our carriers for efficiencies, so stuff like bringing in straight-through processing, and one-touch on data. So, some carriers are looking for efficiencies… Those are the kind of challenges we’re seeing across the market and it’s the very same here in Bermuda.”
Data and technology are also on the mind of David Govrin, global president and CEO of global reinsurance at SiriusPoint who said that it’s a “very complicated topic.” Staying ahead of data and technology and finding ways to gain the right insights is a challenge for clients and partners alike, he said, as they recognize the value that harnessing data and technology can bring.
“I think there is a data and technology race across the industry, and I think there's a lot of thought leadership going into how do you harness and data, and ensure you have feedback on [your data],” he said. “Because getting data is only good if you actually can do something with it and gain insights in terms of the products that you're offering and how you price those products.”
Meanwhile, for Paul Templar, CEO of VIPR and Suzanne Williams-Charles, CEO of BILTIR, innovation – of which technology is a key element – and regulation are front-of-mind considerations. Since she joined BILTIR as CEO, Williams-Charles said she has spent most of her time trying to address one of the top pain points facing the re/insurance market in Bermuda – how to create a robust regulatory environment without stifling innovation.
“I’ve spent a lot of my time helping to strike that balance, or helping to communicate with the regulatory environment, with standard setters, to ensure that that balance is created,” she said. “Because when you create an environment that is [too] strict… it will stifle innovation. Then that does not help with solving problems, it doesn’t help with companies being able to provide solutions.
“I think that there has been a big concern over probably the last couple of years that we may be moving in the wrong direction or too far from a regulatory perspective, and it'll start to inhibit companies’ ability to offer the products that are necessary to serve the community that they're essentially formed to serve.”
Touching on this landscape, Templar added that the increasing regulatory burden being placed on market players means they need to find new ways to comply with these. That comes back to the opportunity presented by data, he said, because these companies need to have access to the information to be able to comply with what they're being asked for.
