From a technological perspective, we decided to delve into the realms of Innovation and Efficiency. I mean, who doesn’t want their business to run more innovatively and efficiently? Do technology solutions really have the ability to drive innovation and efficiency, reduce operational costs and improve return on capital.
We think so and here are three reasons why:
1. Improve data handling to make better informed decisions
2. Maximise automation
3. Help control processes
Given the costs of deploying technology, a strategic approach is required to provide tangible ROI. An organisation should be investing in technology to keep up with the market in which it sits. For (re)insurers, there is an importance in a strategic collaboration with technology providers to increase sales through innovation and reduce costs through efficiency.
For reinsurers, the way in which data is captured and reported on at the primary level will influence business. With the potential for more information to be made available to insurers directly, the need to reinsure may reduce, or the way in which reinsurance is triggered may change. As the underlying risk data changes, so too will the need to capture the data more efficiently.
These changes will require reinsurers to themselves innovate, and put challenges on their own technology to make innovation viable. Legacy systems and inefficient practices that slow down product changes will not be sustainable. End-to-End systems from a single provider able to control the entire lifecycle of a risk would be far more attractive.
Organisations in many sectors often look to technology to reduce costs, and the results can be mixed. This highlights the importance of selection of a trusted technology partner with a strategic view of the market and a vision of the benefits that technology can realise and how these will be achieved.
Underwriting and claims technology advances in AI and Blockchain will certainly add efficiency and remove costs in the medium term. Reducing costs in the shorter term is likely to involve the identification of “quick-win” efficiencies that require low initial investment and where savings can be quickly realised. One of these methods will be in a better use of data.
Identifying a strategic technology partner to supply multiple elements of its technology landscape, allows reinsurers to reduce costs and increase sales through responding to innovation challenges.
While there is no painless solution to the attack that reinsurers are under, it is clear that although technology is the cause of some of these challenges it also provides an opportunity for the reinsurers to address them. Forming a strategic relationship with a technology provider that has a clear vision of the path reinsurers can take and the benefits it will realise is key.
For a more in depth review of this topic, please download our latest whitepaper - Innovation and Efficiency: Technological Solutions to Address Low Capital Return for Reinsurers