Reinsurers must develop new skills: Aon
Aon Benfield has addressed how insurers and reinsurers can identify and capitalise on new growth opportunities amid challenging market dynamics.
Malcolm Steingold, chief executive officer, of Aon Benfield for Asia Pacific, discussed opportunities in a keynote speech at the 14th Biennial Hazards Conference in Australia.
The conference, Beyond Tomorrow was hosted by Aon Benfield. It is one of the largest gatherings of hazard risk professionals from both academia and the re/insurance industry.
With global reinsurance capital at a near-record level of $565 billion, and with sustained pressure from alternative capital sources, re/insurer margins are increasingly under pressure.
Steingold examined how organic growth might be achieved in this environment by focusing on three specific areas.
These were the reintroduction of products to the market using advanced data and analytics such as professional liabilities for financial institutions or product liability for pharmaceuticals; the development of solutions for key emerging risks such as cyber, intellectual property and supply chain risk; and the re-privatisation of risks that were transferred to the public sector in certain regions such as, earthquake, wind, flood, terrorism and US mortgage credit.
Steingold said: “Over the past decade, the market has become more complex with increased regulatory, rating agency and shareholder pressures. This has resulted in some re/insurers adopting a “zero failure” mindset, which may seem to offer a degree of protection, but does in fact stifle innovation and growth.
“Strategically, the industry has the ability to meet client needs, innovate and create an entrepreneurial environment that will bode well for business to rise to address the challenges it is facing. There is plenty of capital in our industry today, but there is also plenty of risk that is not currently being addressed by our industry.
“By developing the skills, capabilities and talent to address these risks, re/insurers will grant themselves new, long-term revenue streams.”
Also discussed at the event by speakers and panelists were the subjects of big data, evolving market trends and how pending technological advancements will challenge the insurance industry to evolve.
