Swiss Re Reinsurance Options CEO on attending to grips with knowledge

As a 160-year-old firm working in each insurance coverage market around the globe, 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 offers – 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 intention is to commercialize the group’s danger data belongings and ship them to different members of the re/insurance coverage ecosystem and past, with purchasers together with brokers, MGAs, governments and property fund managers. It’s an ambition that intently aligns with Swiss Re’s mission and function, he mentioned, which is to make society as an entire extra resilient.  

Using knowledge 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 knowledge, particularly as knowledge turns into extra broadly out there and accessible as a result of if it’s not used ethically, then individuals might be much less prepared to share it and regulators will impose larger 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 fingers of the precise individuals in the precise approach,” Higginbotham mentioned. “However as insurers and reinsurers, we’ve got to be sure that we try this correctly, in any other case that chance will develop into rather more slim. So I believe 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 mentioned, as a result of individuals need issues finished sooner. However whereas underwriting and issuing a coverage in real-time sounds comparatively simple, it merely doesn’t occur that approach for lots of merchandise.

Alongside the demand for pace is the urge for food for elevated effectivity, he mentioned, as corporations wish to make extra correct choices, primarily based 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 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 knowledge, you’re then in a position to construct a technique round that with larger understanding and confidence,” he mentioned. “Finally, all of these items make insurance coverage extra accessible, extra reasonably priced, and extra worthwhile together. It’s about looking for the precise stability for progress – individuals want to have the ability to see merchandise that they need and merchandise that they’ll afford, and insurance coverage corporations 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 common resilience is obvious from the end result of utilizing the precise knowledge in the precise approach, Higginbotham mentioned, nonetheless, it’s not simply in regards to the knowledge itself but additionally the interpretation of that knowledge to permit corporations to know and worth danger extra precisely and extra effectively. As a result of, as an insurer or reinsurer, you need to cost for uncertainty as a result of with out realizing how a danger will carry out, you want to construct security margins into your pricing and allocate extra capital to that danger.

“So, finally, you need to be extra conservative round that danger due to uncertainty,” he mentioned. “However if you happen to take components 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 automotive’s going to carry out, you possibly can go sooner. That’s what knowledge provides 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 corporations needed to discover alternative 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 abruptly a aggressive drawback.

“Naturally, there’s all the time going to be extra to do,” he mentioned. “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 precise cowl, or they don’t have the correct amount. And the surroundings all of us reside and work in is more and more unsure and all of us need to be sure that insurance coverage is there to play its function in societal resilience.

“Finally, the function 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, slightly I believe the appearance of knowledge and expertise simply permits that to proceed to occur. And I consider 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 you need to be working on that degree otherwise you’re going to seek out your self turning into more and more uncompetitive.”