Reinsurance technology, or reinsurtech, is an emerging category within the broader insurtech space, focusing on the unique needs and challenges of the reinsurance industry.
This new wave of technology is driven by advancements in cloud computing, data accessibility, and the growing trend of specialised software to address specific pain points across reinsurance - an industry that’s historically been criminally underserved!
In this blog I’ll outline the evolution of reinsurtech, the impact of cloud computing on the insurance industry, and how technology solutions are transforming reinsurance by addressing the industry's unique needs (compared to insurance).
Reinsurance technology has been slowly developing since the late 1980s, with companies like AIR and RMS leading the way with the introduction of catastrophe modelling software.
The modern Fintech revolution began after the 2008 financial crisis and Insurtech, specific Insurance-focused technology, spun out as its own category shortly thereafter.
The rise of reinsurtech is following a similar journey to insurtech, branching out from its larger parent category with specialised software solutions that address specific pain points experienced by their target customers and users.
One company at the forefront of the reinsurtech movement is Supercede, the reinsurance technology platform that provides a complete solution for cedents, brokers, and reinsurers.
And as Supercede’s CEO, you can believe I’m totally unbiased in that claim.
With the emergence of reinsurtech, other companies are also starting to offer similar solutions in different spaces, helping to deliver an ecosystem which will allow the reinsurance industry become more efficient, effective, and profitable.
The insurance industry has traditionally been slow to adopt new technologies, relying on legacy systems and siloed in-house solutions.
Many times, this leads to companies having no flow between their insurance and reinsurance data.
However, the rise of cloud computing has allowed insurance companies to become more agile and access data more easily, leading to the development of new systems for accounting, policy administration, and modelling.
This increase in accessible data has also led to the emergence of new companies that specialise in helping insurance companies get insights from their data and aggregate it more effectively.
While reinsurtech has similarities with insurtech, the reinsurance industry is quite different from insurance, and technology solutions need to account for these differences.
Reinsurance has always been an industry where brokers work closely with their clients to develop solutions bespoke to the challenges and objectives of their business.
A blend of facultative and treaty to protect their original exposures and retrocession to support any inwards or intra-group reinsurance is just the start. Assessing a client’s needs determines programme structure, inuring relationships, reinstatements, and more.
It’s clear why reinsurance deals don’t fit neatly into solutions built for the insurance industry and demand solutions of their own.
The reinsurance industry is beginning to transform through technology advancements. One particular area of importance relates to APIs, which allow different systems to communicate and share information in real time.
By embracing these new technologies, the reinsurance industry can become more agile and responsive, with faster turnaround times for data, easier collaboration with partners, and improved brand reputation.
One such company worth mentioning is hx, whose product, Renew, helps insurers build, deploy and update their insurance pricing models at great speed.
Why am I mentioning this company?
Well, they integrate directly with Supercede - and to great effect!
Our partnership will see reinsures able to create, validate, broker and quote reinsurance submissions in under 30 minutes instead of 12 weeks.
The reinsurance industry is experiencing a surge in innovation, driven by entrepreneurs leveraging their experience to build technology companies that address long-standing problems in the industry.
This surge is fueled by a growing awareness of the potential benefits of technology and the increasing availability of funding for startups in the reinsurtech space.
As the investment landscape evolves, it will be interesting to see how these innovations continue to shape the reinsurance industry over the next 5-10 years.
As technology advances and more companies embrace cloud computing, data accessibility, and niche software solutions, we can expect the reinsurance industry to become more efficient, effective, and profitable.
It’s becoming crucial for companies in the reinsurance industry to stay ahead of the curve by adopting these new technologies that enable them to better serve their clients and partners, while protecting their balance sheets.
In the future, we can expect to see further integration of advanced technologies, such as artificial intelligence and machine learning, into reinsurtech solutions, improving decision-making, streamline processes, and enhance risk management.
The reinsurtech revolution is just beginning, and its impact on the reinsurance industry is already apparent.
By embracing new technologies and focusing on the unique needs of the sector, reinsurtech companies are helping to shape a more efficient, responsive, and profitable future for the entire reinsurance ecosystem.
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