The firming reinsurance market creates a significant opportunity for reinsurers to achieve faster growth.
The
The reinsurance industry has made advancements around catastrophe modeling, improving the science around natural hazards, and increasing computational capability, which is helping carriers to develop strong underwriting guidelines and frameworks for underwriters or those authorized to write business. However, still, there is a significant challenge in effectively operationalizing underwriting guidelines in a day-to-day underwriting operation due to data and technology constraints. They have huge amounts of
To arrive at a correct pricing decision, reinsurers need to upgrade their data management and governance processes to ensure data integrity and data quality and develop better methods for integrating data —both internal and external sources — to increase the granularity and speed of the risk assessment, and effective pricing in adherence to the underwriting guidelines.
Once the reinsurers have a solid data foundation,
Many reinsurers still need help with basics such as process design, creating workflows that streamline data and operations, redefining the role of the underwriters, building the right targeting operating models, and putting in the right controls.
Let me share a couple examples that show how integrated data, automation, and AI combine to unleash underwriting expertise.
One multi-line specialty reinsurance carrier we worked with had a fragmented submission management process with multiple systems and data repositories for each line of business. That has resulted in an inefficient underwriting process with highly manual work of accessing multiple sources to gather data, limited validation, poor data quality, etc. The process also lacked transparency of submission in real-time due to system constraints. The key to fixing the carrier's issues was to streamline the end-to-end process across submissions, risk clearance, risk assessment, quote processing, and policy issuance, and implement a unified workbench for treaty and facultative business across all lines and geographies. A holistic approach to people, process, data, and technology design enabled complex underwriting and ensured UW discipline. Making these changes reduced submission handling time by 70%, decreased underwriting operation costs by 40%, and improved the quote-to-bind ratio resulting in top-line growth and improved broker experience.
We also worked with a reinsurer that was struggling with outdated and inefficient processes that produced inconsistent data. Plus, it needed constant support from the IT department to make changes to existing processes. All these issues created poor customer experiences, impacted productivity, and reduced profitability. Our solution 'listened' for the arrival of data
How should companies proceed?
Reimagine technology-enabled business processes by focusing rigorously on business outcomes and harnessing the data effectively through a purpose-built enterprise analytics insights engine, which then should be scaled and sustained through the right organizational structure.
With the world only becoming more complex, any solution will require an integration of technology and expertise. One smart strategy would be for companies to look for a partner that brings both deep industry knowledge as well as technical chops. A partner can help you navigate a fast-changing business environment while incorporating technological advances.
But the key point is to start as soon as possible. Periods of