The reinsurance industry heads to the first in-person Monte Carlo Rendezvous since 2019 with technology in a very different place but many of the same business challenges in play. The market is arguably more fragmented than ever, with a mix of manual, automated and hybrid underwriting approaches being deployed and capacity being distributed via a complex network of point-to-point connections and inefficient legacy processes.
There is a clear need to standardise data and for reinsurers and intermediaries to adopt a data-first approach to accelerate the move from analogue to digital trading. The eradication of outdated approaches like manual bordereaux in favour of seamless real-time data exchange is key. This will drive significant operational savings while also enabling more-informed risk selection and pricing decisions and feeing up capital throughout the distribution chain – benefiting all parties. Solutions in the market already do this today.
Verisk Specialty Business Solutions (SBS) supports digital trading at every step of the (re)insurance life cycle through its suite of cloud-based management tools and distribution ecosystems like Whitespace and Sequel Hub which are augmented with data, AI, machine learning and analytics capabilities from across the Verisk group (predictive models from Extreme Event Solutions (formerly AIR) or ESG data from Maplecroft, for example).
For reinsurers, the biggest benefits to be gained from this data revolution are the ability to manage capital more efficiently and get closer to distribution partners. Understanding exposures, aggregations and accumulations on a real-time basis rather than waiting on months-old bordereaux data is a game-changer for capital management as it enables reinsurers to strategically and flexibly deploy capacity where it delivers most value, moving capital where it is being underutilised or limits are being stretched.
Exposure management solutions like Enterprise Exposure Manager (EEM) and Sequel Impact were designed with this in mind, giving reinsurers granular real-time visibility and control over their exposures, enabling them to deploy capacity with greater confidence and agility. In a time of economic uncertainty, rising loss severities and hard market opportunities, this could hardly be more important.
In a fragmented, broker-led marketplace, real-time visibility in the distribution chain is also key, enabling reinsurers to communicate and transact with distribution partners quickly, efficiently and consistently. Digital trading platform Whitespace gives reinsurers a real-time view of live placing data, negotiations and tracked changes in the distribution chain. Waiting around for months-old information, or relying on document-based placement platforms is simply no longer acceptable – reinsurers need to know what is happening in their portfolios today.
Whitespace gives them access to an online placement dialogue with upstream distribution partners that is accessible anytime, anywhere, on any device.
All the players in the distribution chain have an important role to play in the reinsurance market of the future, and solutions like these enable everyone to do business cheaper, faster and with better information at their fingertips.
The market knows this is where it needs to head but for the first time in my career, advances in technology may actually be outpacing the market’s ability or willingness to adapt. However, there is no need for a major tech overhaul or to wait around for the next generation of centralised systems to trade in this way. Next-gen digital trading solutions developed in the private market are already enabling it today.
It will be fascinating to see whether the role of technology in delivering a more seamless, data-first reinsurance market has risen up the agenda since 2019 at this year’s Rendezvous. With the world in flux and so many macro challenges to unpick, from Ukraine to climate change, digital trading may get overlooked. If that is the case, it only enhances the competitive advantages being gained by those embracing the future of trading today.
