Reinsurers are facing pressures from a prolonged soft market followed by an erratic business cycle, losses from man-made and natural catastrophes, and open-ended liabilities like asbestos and terrorism. These pressures are compounded by the lagging technology solutions in the space; reinsurers are looking for stable, robust systems that can support their current business.
Focus is being put on technology strategies to attract insurer clients and improve profitable decision-making through core systems replacements and investments in business intelligence and modeling, as most reinsurers view data analysis as core to their business. It is crucial to move from Excel-based analysis to more sophisticated technology, like AI and machine learning.
Alternative capital is providing stability for reinsurers, despite expectations that investors would flee at the first significant cat activity. The reinsurance market may also offer the perfect use case for blockchain. The potential impact of blockchain is being monitored in the space, and several insurers and reinsurers have developed prototypes for complex, multi-party reinsurance treaties or conducted pilots for reinsurance and cat bond swaps.
Reinsurance CIOs and business executives should consider the following top technology priorities: business intelligence and analytics to find new opportunities for creating competitive advantage; BPM/workflow enhancements to centralize from spreadsheets and improve user experience; and auditing, compliance, and control considerations to meet regulatory standards and assure compliance with new risk-based capital requirements.
More on this can be found at: https://dev-novarica.pantheonsite.io/business-and-technology-trends-reinsurance-2018/.
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