Swiss Re Reinsurance Options CEO on attending to grips with information

As a 160-year-old firm working in each insurance coverage market world wide, Swiss Re has a 360-degree vantage level of what’s occurring in any particular sector or enterprise line at any given time. In his three a long time serving with the re/insurance coverage behemoth in quite a lot of roles, Russell Higginbotham (pictured) has seen first-hand the quantity and the standard of information and information this gives – and it was with this in thoughts that Swiss Re’s Reinsurance Options division was established.

Now a yr into his tenure as CEO of the division, he famous that its final purpose is to commercialize the group’s threat data belongings and ship them to different members of the re/insurance coverage ecosystem and past, with shoppers together with brokers, MGAs, governments and property fund managers. It’s an ambition that intently aligns with Swiss Re’s mission and objective, he mentioned, which is to make society as an entire extra resilient.  

Using information to bridge the worldwide safety hole

At its core, insurance coverage is an intangible proposition, primarily based on a promise to pay and belief is on the coronary heart of this providing. It’s a lot the identical with information, particularly as information turns into extra broadly accessible and accessible as a result of if it’s not used ethically, then folks shall be much less prepared to share it and regulators will impose better restrictions on its use.

“There’s this nice alternative to enhance societal resilience, to shut the worldwide safety hole and to get extra insurance coverage into the palms of the suitable folks in the suitable approach,” Higginbotham mentioned. “However as insurers and reinsurers, we now have to guarantee that we do this correctly, in any other case that chance will turn into way more slender. So I feel it’s on us to virtually self-regulate round that.”

Pace and effectivity – the dual calls for of information

Pace is the primary consideration, Higginbotham mentioned, as a result of folks need issues carried out quicker. However whereas underwriting and issuing a coverage in real-time sounds comparatively easy, it merely doesn’t occur that approach for lots of merchandise.

Alongside the demand for velocity is the urge for food for elevated effectivity, he mentioned, as corporations wish to make extra correct selections, primarily based on higher information optimization. That helps them wanting throughout their books of enterprise and understanding intimately how they’re performing, the place the problems are and the place the alternatives lie. Having this extra granular readability on their enterprise is what helps progress as a result of it unlocks extra insights into new areas for progress, whether or not that’s a market, a geography or a product.

“With higher high quality information, you’re then in a position to construct a technique round that with better understanding and confidence,” he mentioned. “In the end, all of this stuff make insurance coverage extra accessible, extra inexpensive, and extra worthwhile together. It’s about looking for the suitable stability for progress – folks want to have the ability to see merchandise that they need and merchandise that they’ll afford, and insurance coverage firms have to have the ability to present that. So, all of it comes collectively fairly neatly.”

Understanding the connection between digital development and resilience

The hyperlink between digital development and normal resilience is obvious from the result of utilizing the suitable information in the suitable approach, Higginbotham mentioned, nevertheless, it’s not simply concerning the information itself but additionally the interpretation of that information to permit firms to know and worth threat extra precisely and extra effectively. As a result of, as an insurer or reinsurer, it’s a must to cost for uncertainty as a result of with out figuring out how a threat will carry out, it’s essential construct security margins into your pricing and allocate extra capital to that threat.

“So, finally, it’s a must to be extra conservative round that threat due to uncertainty,” he mentioned. “However if you happen to take parts of the uncertainty away, to extend accuracy and understanding, it builds a a lot stronger basis for options growth, as a result of you are able to do it with confidence. Basically, if you know the way your automobile’s going to carry out, you may go quicker. That’s what information offers you the potential to do.”

How is the insurance coverage market responding to this providing?

Assessing how the market is responding to this chance, he famous that reinsurers and insurers have been on a knowledge enrichment journey for some years now. The pandemic accelerated curiosity on this space, he mentioned, as a result of firms needed to discover alternative ways to conduct their enterprise and help their prospects. What may beforehand have been labeled as ‘innovation’ or  ‘aggressive benefit’ merely grew to become desk stakes for swathes of the market, as a result of to be with out these capabilities was all of the sudden a aggressive drawback.

“Naturally, there’s all the time going to be extra to do,” he mentioned. “However the basic problem, which hasn’t modified, is that not sufficient folks and companies have insurance coverage cowl. Both they don’t have it in any respect or they don’t have the suitable cowl, or they don’t have the correct amount. And the atmosphere all of us dwell and work in is more and more unsure and all of us should guarantee that insurance coverage is there to play its function in societal resilience.

“In the end, the function of insurance coverage is to supply a security web when all the opposite types of mitigation that you’ve got don’t work. That hasn’t modified, reasonably I feel the appearance of information and know-how simply permits that to proceed to occur. And I imagine that the insurance coverage business is totally embracing that now as a result of it has to. If you wish to be aggressive sooner or later it’s a must to be working on that degree otherwise you’re going to search out your self turning into more and more uncompetitive.”