The data-driven future of reinsurance and how to stay in the race

As technological advancements in reinsurance gather pace, Louis de Segonzac, chief underwriting officer – Americas for MS Re, considers how humans are still part of the process.

Since its analogue beginnings – an underwriter equipped with a quill and a ledger – technology has been pivotal to the progress of the insurance industry.

Over the centuries, rapid developments in data collection, analysis and application have enabled underwriters to explore and understand the risks associated with an ever-growing range of sectors and scenarios.

This has allowed them to offer their clients the assurance of cover when it is needed the most, while keeping their own businesses stable in the most challenging of times.

Reinsurance, as a vital component of the sector, has been part of this tremendous technological shift, moving from spreadsheets to mainframe accounting systems to today’s pioneering, AI-led innovations.

Minute details

The innovations begin with revolutionising basic data-gathering techniques, which are cumbersome, time-consuming and prone to human error. They promise not only lightning-fast processing and accuracy, but also enhanced data consistency. This should result in a faster, more reliable and more transparent underwriting process no matter the size or shape of the deal, nor the situation in which our clients find their portfolios.

Being able to analyse portfolios at a granular level should also help reinsurers to refine and tailor what we offer our clients, creating truly bespoke solutions that not only improve their business efficiency, but also offer strategic insights.

If we can drill down into their portfolios and demonstrate their exposures on a risk level, we become a much more useful partner to our clients across the whole business cycle, not just around renewals.

For us, as commercial businesses, the benefits are clear, too. With improved data and almost effortless analysis and application – at least for those of us who aren’t building the algorithms behind these technologies – we can respond much more quickly and dynamically to unexpected events. Our assumptions and calculations can be based on and move with real-time data, ensuring we can cite our position with an accuracy we’ve never known before.

This should help us build stronger, more strategic relationships with our clients.

Invest to be the best

Today, many in our sector are investing millions to upgrade systems in an effort to improve modelling, pricing and outcomes for everyone in the value chain.

But while this spend on technology is unquestionably necessary – at MS Re, we are backed by a strong shareholder that is committed to make our own significant systems upgrades – it is important to realise that it does not offer the solution on its own.

As an industry we must also enhance the human-led processes and services around this technology to help our clients meet their objectives and challenges. Without the underwriter’s experience and expertise to guide even the most sophisticated model it is likely to land wide of the mark.

The role of the underwriter is likely to shift, too, as much of the heavy lifting of data that takes up our days is replaced by a need to be both solution-led and closer to our clients.

With technology advancing at its current rate, we can almost see a time when we will be able to offer our clients solutions instantaneously, efficiently and with total transparency and look-through.

Although there is still a way to go, for those of us who remember manual data entry, it’s an exciting prospect.