The insurance industry is undergoing a rapid and profound transformation as businesses seek to modernise their technology and processes to meet the expectations and demands of customers with the COVID-19 pandemic further accelerating the pace of change. Awareness of the need for protection has grown among businesses and consumers alike, while customers flock to digital channels to interact with providers. According to McKinsey in a report published October 2020, COVID-19 has accelerated the digitisation of customer interaction by 3-4 years, supercharging digital transformation programmes and speeding up organisations’ adoption of automated processes along the way.
Reinsurance, however, has largely missed out on this transformation. This is a growing problem because the volume of data that cedents and actuaries have to process is proliferating at breakneck speed. Yet the industry is trying to manage 21st century data using 20th century processes that require huge amounts of manual labour and are subject to human error.
As a result, reinsurance businesses are leaving a vast amount of value on the table. Unconverted opportunities. Unprotected risk. Sub-optimal structuring and pricing of treaties. Tying up expensive actuaries on manual data-processing work when they should be focusing on more strategic activities. All of this impedes revenue growth and has a negative impact on profit margins.
That’s why we have compiled this discussion paper. In it, we examine a universal pain point for reinsurance practitioners: the lack of shared standards for gathering, formatting, and consuming data.
We spoke to a number of leading reinsurance insiders to get their views on the biggest challenges with data capture and utilisation to understand how these challenges are impeding their business, and, most importantly, their insights into how common data standards can solve these challenges to create a reinsurance industry that can thrive in a digital world.
Only by understanding the huge potential benefits of change – and then pushing for that change – will the industry improve. So we invite you to review their thoughts and get involved in the conversation. What are your biggest data challenges? How could common data standards improve your business?
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