Years of difficult market conditions are challenging reinsurers to come up with creative solutions. As a result, reinsurers are making technology investments to better control risk and decision-making while also keeping up with regulatory demands.
Data analysis is central to reinsurance and is becoming a top area of focus. Reinsurers control their risk through sophisticated risk analysis, careful pricing, and capital management. Many are investing in BI and analytics as well as sophisticated specialized components like modeling tools. Some reinsurers are even serving as data aggregators, packaging data and book of business analytics for small and midsized insurer clients. Improving data collection and control are also key initiatives for most insurers to meet regulatory standards.
Reinsurers are also looking at core system replacement to centralize business from spreadsheets and gain better access to data; an increase in audits and regulation is another driver. Reinsurer workflow systems are often less developed than those of high-volume, primary insurance peers. Reinsurers are considering the impact of imaging, workflow/business process management, and rules-based underwriting systems.
Digital, data, and core technology investments will continue to be a priority for reinsurers to adapt in the face of a soft market, losses from catastrophes, and new open-ended liabilities. Reinsurers are now looking to create more digital engagement models with their partners, brokers and primary insurers. Novarica’s recent report, Business and Technology Trends: Reinsurance provides more information on trends and investment priorities for reinsurers.
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