VIG Re to fight inefficiency as a ‘digitally-enabled reinsurer’
Transaction costs have become too high and processes are inefficient, according to Johannes Martin Hartmann, chairman of VIG Re, as he discussed key issues affecting the reinsurance industry.
“If you look at reinsurance industry transaction costs, and compare them with those in banking, they are very high,” he said.
The chair of VIG Re, the reinsurance arm of VIG—the Vienna Insurance Group—emphasised that one of the founding principles of the reinsurance company was to come up with a lean and cost efficient operating model.
“We do not want our clients, or end customers, to pay for an inefficient or overly complex administration. For us, setting up a target operating model that allows us to deliver on the promise of an efficient organisation is key,” he explained.
To build on this outlook, VIG Re is keen to develop the company as a “digitally-enabled reinsurer”.
“To achieve that we’re going to make significant investments in the next few years in the standardisation and automation of our backend processes, including the usage of blockchain technology in accounting and claims operations. In addition, we aim to raise the base in our underwriting through enhanced data analytics and artificial intelligence (AI),” Hartmann said.
He explained that the reinsurer’s internal focus will be on how it can re-design processes and realign the underwriting process to benefit fully from these new technologies. This transition will be a main focus for VIG Re for the next three years, he said.
“I consider ease of doing business and fast turnarounds as hygienic factors for a reinsurer when cooperating with cedants and brokers,” he stressed. “This also means that for the next three years we will not pursue new market entrances or products, but focus on servicing our existing clients in an ever better way.
“Understanding what matters for your client, ensuring a high quality of services, offering market insights and ultimately supporting our clients in achieving their targets is paramount for building a sustainable partnership.”
