12 September 2017 Insurance

Monte Carlo survey: Which parts of the value chain does technological innovation impact the most?

In association with Swiss Re, Monte Carlo Today conducted surveys of senior industry executives ahead of and during the conference. Their responses to various questions are published here.

Which parts of the value chain does technological innovation impact the most?

"As a specialty re/insurer, we see the key impacts being around data analytics and those functions typically labelled ‘back office’ as opposed to the more obvious applications in customer-facing areas as seen in retail type businesses.

Big ones will be robotic process automation (spanning finance, actuarial, risk and other functions), machine learning and artificial intelligence (for example extracting risk profiles from unstructured data / slips to support underwriting) and ever improving quantitative modelling capabilities."
Simon Spurr, group head of risk management, IGI

"Technological innovation is critical to all elements of the value chain for insurers to maintain profitability in an increasingly competing world, but different segments have different relative priorities. Personal lines and SME insurers need to continue to innovate their front end and underwriting to be competitive and continue to capture and retain customers. Commercial lines and reinsurers need to continue to innovate their pricing and data analytics as well as streamline their backend functions to improve profitability."
Mohammad Khan, head of general insurance, partner, PwC

"Within pricing and underwriting, the shift towards using personalised, and even real-time, data and advanced analytics—rather than generic, historical risk data—is a game-changer. In some contexts this even has the potential to prevent accidents and claims from happening. And then there’s the transformative effect artificial intelligence (AI) is having on the customer experience: 79 percent of insurers around the world think AI will revolutionise the way they gain information from, and interact with, their customers."
Simon Tottman, global P&C insurance research lead, Accenture

What are the biggest opportunities or new risks you see coming?

"Bermuda’s innovation in ILS has encouraged the use of catastrophe models in pricing, alternative capital, and sidecars and made it mainstream. The next step for the reinsurance sector is to address the insurance gap that exists globally, in which Bermuda will be a key player. There is an excellent opportunity for the capital markets and re/insurance industries to work closely together to provide the valuable resources required to provide protection for areas in need, and to narrow the global insurance gap."
Charles Cooper, chief executive, Reinsurance at XL Catlin

"The biggest opportunity and risk facing the industry now stems from technology and the resulting amount of data and insights that will generate. With this comes great opportunities to better understand risks but also great challenges. With regard to big data, unless re/insurers have the ability to understand and analyse disparate sources of data there will be opportunities that will be missed—or worse –risks written without using all the available knowledge about them." 
Francis Fortunato, chief executive, CATEX

"One of the biggest opportunities is insurtech and the new capital it introduces from the primary insurance base, particularly via MGAs. More capacity is now based in Bermuda. The cat-centric market of yesteryear continues to change; even the most niche risks are welcome. We are yet to see the extent to which insurtech opportunities will threaten past practices. We must always balance the agility and efficiency that technology provides with the invaluable trust, relationships and current expertise that drive our industry."
Neville Ching, managing partner, Capsicum Re Bermuda

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Today’s Monte Carlo stories

Third party capital likely to dampen pricing peaks: Axis CEO Benchimol

Harvey and Irma will cause buyers to rethink strategies

XL Catlin seeks respect rather than size post merger

A new ILS hub to ponder

Protectionism and more excess capital

Swiss Re sees growing collaboration opportunities with insurers

Reinsurers and ILS to benefit from post-Irma demand

Time to shine after the storms have passed

Innovation a top concern of brokers

AM Best maintains negative outlook

Turn a positive outlook into an upgrade

Value of reinsurance is under-reported

Irma loss comparable to Katrina/Sandy

Risks shift from states to private market

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