Teams must be able to share data quickly and seamlessly to adapt to the opportunities and uncertainties of the future.
Reinsurers are processing more data and sharing data with more internal and external stakeholders than ever before. That data must continue to enable the smooth and timely operation of business in an environment of increasingly stringent regulatory, reporting, privacy and compliance obligations as well as rising client expectations.
Historically, reinsurers have deployed multiple systems to manage their various operational processes, business units and geographical operations. A typical infrastructure might include, for example, separate underwriting, claims, reinsurance, exposure, actuarial, pricing, credit control, financial, CRM, reporting and market-facing systems in addition to various other administrative components – many of which may not be talking the same digital language.
Meeting today’s data demands is becoming increasingly challenging using disparate systems, and many reinsurers are instead designing and implementing end-to-end ecosystem architecture that enables data to flow seamlessly and consistently through the entire system landscape. Here are five key reasons why:
1. The data burden is rising
A reinsurance company is no longer just an underwriter of insurance portfolios and payer of claims – risk management, risk modelling, actuarial reserving and pricing, and compliance are just some of the facets now seen as core to any reinsurance business. Each has its own specialised data requirements and the volume of data that needs to be shared between them, as well as to third-party and central market systems, is rising all the time.
Ensuring this data flows smoothly by sharing data manually is increasingly untenable. With an integrated end-to-end solution, data flows seamlessly between teams, removing the need for manual data sharing and rekeying, and ensuring all parties in the business share one consistent version of the truth.
2. Multiple systems create risk
Using multiple datasets and sharing data manually exposes reinsurers to a number of risks, from the timeliness of the information (as certain systems may lag others or work on different timeframes) to the consistency and accuracy of the data itself (as working with different datasets and protocols raises the risk of duplication and errors).
Working from one consistent dataset is vital for the smooth operation of any reinsurance company. This is particularly important in the new age of remote work and for global companies when teams and individuals cannot interact face-to-face and need to rely on the information presented to them.
3. Meeting compliance challenges
Just as data volumes are rising, so are regulatory and reporting demands. Today’s reinsurers must, for example, check every single payment transaction to ensure no counterparties are persons of interest to authorities or subject to international sanctions. Processing and sharing that volume of data in a timely manner, including real-time, across so many business units can only be achieved through an application-to-application link, not manually.
Reinsurers must also be able to gain insight into business performance and forecasting on any part of their organisation at the touch of a button with confidence the data is accurate and timely. IFSR17, for example, requires reinsurers to report both their current and forecasted future position across all business units. Pulling data from multiple systems makes it difficult to generate a consistent and reliable snapshot of an organisation’s position at any given point in time.
Meanwhile, data privacy breaches can lead to increasingly severe fines and reputational damage – and data management is made far simpler in one integrated ecosystem.
4. Improving the client experience
Speed and consistency of service is key to maintaining business relationships. Today’s global reinsurer needs to process data 24/7 to meet the expectations of clients and brokers, and cannot afford to wait on business units or offices using separate systems to process information. Deploying an end-to-end platform simplifies workflows and allows reinsurers to automate certain tasks, meaning data flows more quickly through the business, the strain on human resources is reduced and the client experience is enhanced.
5. Future-proofing the business
An end-to-end platform is not a monolithic system that talks only to itself – it is an integrated ecosystem of component parts that seamlessly feed each other. The relationships between those systems can change over time as organisations evolve – and the pace of change in today’s market will only increase. Flexible, well-architected infrastructure for sharing information between systems sets you up for both the advances and unknowns of the future. This is also why we are firm supporters of unified messaging standards for the industry as this will help futureproof the way systems interact.
Despite the clear benefits of deploying an end-to-end platform architecture, inertia, resistance to change, reluctance to invest for the long-term and a wariness of automated data sharing are some of the reasons holding reinsurers back from making the necessary changes.
This is a very dangerous game to play. Real-time data exchange is now mission critical. Many leading reinsurers are busy implementing seamless end-to-end platforms or already have them in place – and their competitive advantage over the have-nots is widening.
Reinsurers operating with closed, fragmented systems lack the agility to react to the evolving market and digital environment and must forever rely on the data they have today. With the pace of change only likely to accelerate from here, the consequences for competing so inefficiently will be severe.