Swiss Re Reinsurance Options CEO on attending to grips with knowledge

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 a wide range of roles, Russell Higginbotham (pictured) has seen first-hand the quantity and the standard of information and knowledge this supplies – 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 goal 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 goal, he stated, which is to make society as a complete extra resilient.  

Using knowledge to bridge the worldwide safety hole

At its core, insurance coverage is an intangible proposition, based mostly on a promise to pay and belief is on the coronary heart of this providing. It’s a lot the identical with knowledge, particularly as knowledge turns into extra broadly obtainable and accessible as a result of if it’s not used ethically, then individuals might be much less keen 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 arms of the proper individuals in the proper method,” Higginbotham stated. “However as insurers and reinsurers, we’ve to ensure that we try this correctly, in any other case that chance will change into way more slender. So I feel it’s on us to virtually self-regulate round that.”

Velocity and effectivity – the dual calls for of knowledge

Velocity is the primary consideration, Higginbotham stated, as a result of individuals need issues executed quicker. However whereas underwriting and issuing a coverage in real-time sounds comparatively easy, it merely doesn’t occur that method for lots of merchandise.

Alongside the demand for pace is the urge for food for elevated effectivity, he stated, as companies need to make extra correct choices, based mostly on higher knowledge optimization. That helps them trying 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 development as a result of it unlocks extra insights into new areas for development, whether or not that’s a market, a geography or a product.

“With higher high quality knowledge, you’re then in a position to construct a technique round that with better understanding and confidence,” he stated. “Finally, all of this stuff make insurance coverage extra accessible, extra inexpensive, and extra worthwhile together. It’s about looking for the proper stability for development – individuals 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 basic resilience is obvious from the result of utilizing the proper knowledge in the proper method, Higginbotham stated, nevertheless, it’s not simply in regards to the knowledge itself but additionally the interpretation of that knowledge to permit firms to grasp and value 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 understanding how a threat will carry out, it’s essential to construct security margins into your pricing and allocate extra capital to that threat.

“So, in the end, it’s a must to be extra conservative round that threat due to uncertainty,” he stated. “However when you 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 knowledge 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 an information enrichment journey for some years now. The pandemic accelerated curiosity on this space, he stated, as a result of firms needed to discover other ways to conduct their enterprise and help their prospects. What would possibly 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 immediately a aggressive drawback.

“Naturally, there may be all the time going to be extra to do,” he stated. “However the elementary problem, which hasn’t modified, is that not sufficient individuals and companies have insurance coverage cowl. Both they don’t have it in any respect or they don’t have the proper cowl, or they don’t have the correct quantity. And the atmosphere all of us reside and work in is more and more unsure and all of us must ensure that insurance coverage is there to play its position in societal resilience.

“Finally, the position of insurance coverage is to supply a security web when all the opposite types of mitigation that you’ve don’t work. That hasn’t modified, fairly I feel the appearance of knowledge and know-how simply permits that to proceed to occur. And I imagine that the insurance coverage trade is absolutely 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 stage otherwise you’re going to seek out your self turning into more and more uncompetitive.”