CEO of Swiss Re Reinsurance Solutions on handling data | Insurance business America
“Too few people and companies have insurance coverage”
reinsurance
By Mia Wallace
As a 160-year-old company operating in all insurance markets around the world, Swiss Re always has a 360-degree view of what is happening in a specific sector or business area. Russell Higginbotham (pictured) has seen first-hand the amount and quality of knowledge and data it provides in his three decades working in various roles for the re/insurance giant – and before this The background is Swiss Re’s Reinsurance The Solutions division was founded.
Now, a year into his role as the division’s CEO, he noted that its ultimate goal is to commercialize the organization’s risk knowledge assets and disseminate them to other members of the re/insurance ecosystem and beyond, clients including brokers , MGAs, Governments etc Real Estate Fund Managers. It is an ambition that closely aligns with Swiss Re’s mission and purpose, which is to make society as a whole more resilient, he said.
Using data to bridge the global protection gap
At its core, insurance is an intangible offering based on a promise to pay, and trust is at the heart of that offering. It’s a similar story with data, especially as data becomes increasingly available and accessible, because if it’s not used ethically, people will be less willing to share it and regulators will place more restrictions on its use.
“There is a great opportunity to improve society’s resilience, close the global protection gap and get more insurance into the hands of the right people in the right way,” Higginbotham said. “But as insurers and reinsurers we have to make sure we do this right, otherwise those options become much narrower. “So I think it’s up to us to almost self-regulate in this regard.”
Speed and efficiency – the dual requirements of data
Speed is the first consideration, Higginbotham said, because people want things done faster. While writing and issuing a policy in real time sounds relatively easy, this is simply not the case with many products.
In addition to the demand for speed, there is also a desire for greater efficiency, he said, as companies look to make more accurate decisions based on better data optimization. This allows them to look through their books of business and understand in detail how they are performing, where the problems lie and where the opportunities lie. This more granular clarity about their business supports growth as it enables greater insight into new growth areas, be it a market, region or product.
“With better quality data, you can then develop a strategy based on it with greater understanding and confidence,” he said. “Ultimately, all of these things make insurance more accessible, more affordable and, in combination, more profitable. It’s about finding the right balance for growth – people need to be able to see the products they want and the products they can afford, and insurance companies need to be able to offer that. So it all fits together quite well.”
Understanding the connection between digital progress and resilience
The connection between digital advancement and overall resilience comes as a result of the right use of the right data, Higginbotham said. However, it’s not just about the data itself, but also about interpreting this data so that companies can understand and assess risks more accurately and efficiently. Because as an insurer or reinsurer you have to take uncertainty into account, because without knowing how a risk will develop, you have to build safety margins into your pricing and allocate more capital to that risk.
“Ultimately, because of the uncertainty, you have to be more conservative with this risk,” he said. “But when you remove elements of uncertainty to increase accuracy and understanding, it creates a much stronger foundation for developing solutions because you can do it with confidence.” Essentially, if you know how your car will behave, you can drive faster. That’s what data gives you the potential to do.”
How does the insurance market react to this offer?
Assessing how the market is responding to this opportunity, he noted that reinsurers and underwriters have been on the data enrichment journey for several years now. The pandemic has accelerated interest in this area, he said, as companies need to find other ways to conduct business and support their customers. What might once have been called “innovation” or “competitive advantage” simply became the deciding factor for large parts of the market, because foregoing these capabilities was suddenly a competitive disadvantage.
“Of course there will always be more to do,” he said. “But the fundamental challenge that hasn’t changed is that not enough people and businesses have insurance coverage. Either they don’t have it at all, or they don’t have the right coverage, or they don’t have the right amount. And the environment in which we all live and work is becoming increasingly uncertain and we all need to ensure that insurance can contribute to societal resilience.
“Ultimately, the role of insurance is to provide a safety net when all other forms of mitigation available fail to work. Nothing changed about that. Rather, I think the advent of data and technology simply allows this to continue to happen. And I believe that the insurance industry is now fully embracing that because it has to be that way. If you want to be competitive in the future, you have to operate at this level, otherwise you will become less and less competitive.”
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2024-02-06 15:58:54
www.insurancebusinessmag.com
