AM Best develops criteria to assess innovation in insurers
The re/insurance industry is facing a structural shift as a consequence of the impact of technology, but not every insurtech venture and vendor will be successful, Stefan Holzberger, chief rating officer at AM Best, told delegates at PCI yesterday.
Speaking at a briefing at the PCI conference in Miami, Holzberger cautioned that there were signs that the insurtech trend is showing signs of being similar to the dotcom bubble.
“I need to be frank with you,” he warned. “It’s possibly fair to say that there are bubbles forming when it comes to innovation.
“The number of vendors and insurtech startups and companies that the market is talking to on a weekly if not a daily basis will not all be around a year, two years, five years from now.
“Everyone is talking about it as the next big thing that will change our industry overnight. It probably won’t, and at some point that bubble is going to burst and a lot of these insurtech companies and vendors will not be around.”
He added that, similar to the dotcom bubble, once the dust settles the industry will see e-commerce become more prevalent and potentially take a hold throughout the market.
“The point is that for us there’s a lot of hype, there’s a bubble forming, but there is a structural shift taking place in the industry. The pace of change in the industry is different from five, 10, 20 years ago,” he said.
In an effort to assess individual companies’ reaction to innovation AM Best plans to roll out a set of new criteria to assess the level of innovation in insurance companies, according to Holzberger.
He said AM Best is planning to assess innovation via a multi-stage process that should be in place by the end of 2019, adding that the rating agency will classify innovation as being a widespread process within an organisation not limited to technology, but which could factor in a substantial amount of it.
Get all the latest re/insurance industry news with our daily newsletter - sign up here.
More of today's news from PCI
Navigators boss eyes global growth goals post Hartford deal
Blanch intends new broker COIN Re to be a disruptive force
PartnerRe seeks top five place
Many lines in a ‘holding pattern’ on rates for renewals
Pragmatic cedants will prefer to preserve their long-term relationships with reinsurers: Holborn
Some insurers should reinvent themselves as tech firms
ILS investors in double flight to quality post-loss creep
New risks and a united front for Aon
Everest Insurance’s fine-tuning
Reinsurers warm to mortgage risk
Swiss Re’s Flood Toolkit grows
No bright spots for reinsurers
