Reinsurers Investing in Analytics and Core Systems to Meet Evolving Needs, Says Novarica
Bill Sinn | January 31, 2019
The reinsurance business faces numerous challenges, including years of soft market conditions followed by sudden, sharp hardening periods; tremendous losses from man-made and natural catastrophes; and open-ended liabilities such as asbestos and terrorism, requiring reinsurers to adapt and come up with creative solutions. In a new report, Business and Technology Trends: Reinsurance, research and advisory firm Novarica provides an overview of reinsurers' business and technology issues, data about the marketplace, several examples of recent technology investments by reinsurers, and top technology priorities for 2019 and beyond.
"Insurers are feeling the pressure to 'simplify' their products to appeal to Millennial consumers and better utilize online sales channels," said Jeff Goldberg , Executive Vice President of Research and Consulting, and co-author of Novarica's new report. "However, the inverse is true with reinsurance contracts: as the insurance products simplify, relationships between insurers and reinsurers become more complex. A simpler insurance product requires the reinsurance stage to handle more risk calculation."
Key findings of the report include:
- Business intelligence and modeling are critical. Data analysis is central to the reinsurance business. Pressure from competitors means moving from Excel-based analysis to more sophisticated technology. Larger reinsurers are investigating AI and machine learning.
- Reinsurers are replacing core systems. Reinsurers are centralizing business and dealing with an increase in audits and regulation, rather than a drive for modern technology.
- Alternative capital is providing stability. Despite expectations that investors would flee at the first significant cat activity, most are recapitalizing. The availability of capital is a factor in subdued rate increases.
Please contact email@example.com or call Victoria Spitz at 833-668-2742 Ext. 130 for more information.
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