As the global reinsurance industry meets in Monte Carlo for the 65th edition of the Rendez-Vous de Septembre (RVS), we spoke with the Chief Executive Officer (CEO) of Swiss Re Reinsurance Solutions, Russell Higginbotham, about the division’s value proposition and critical differentiators in an evolving industry.
Greater efficiency and innovation were key themes of the discussion, and Higginbotham started by explaining how Swiss Re’s value proposition helps clients become more efficient in the market.
“As the digital transformation of the insurance industry is continuously accelerating, insurers are increasingly relying on state-of-the-art data- and tech-driven solutions to stay relevant and competitive. In this challenging market environment, Swiss Re’s newly launched Reinsurance Solutions division offers a suite of software products and consulting services to help our existing and new clients improve their business performance,” said Higginbotham.
He explained that the Swiss Re Reinsurance Solutions arm of Swiss Re Group, one of the world’s largest reinsurers, partners with insurers and other members of the insurance ecosystem to increase their efficiency with tailored or standardised products and services.
“We do that by leveraging our data combined with third-party data, supported by our tech capabilities and underpinned by Swiss Re’s risk knowledge,” said Higginbotham.
It could be argued that the industry has gone through a period where efficiency and smoothing the transfer of risk along the market chain appears to have dropped off the agenda for many, but Higginbotham told Reinsurance News that efficiency is still extremely important.
“The persistent hard market environment creates new challenges for insurers to reach their business goals, so achieving more efficiency is a dominant topic in our current discussions with clients. Swiss Re Reinsurance Solutions is focused on helping insurers evolve their businesses with the support of innovative technologies and powerful data models, providing better insights to identify new opportunities in the market. By doing that, our broad range of software products and consulting services spans the entire insurance value chain, expanding Swiss Re’s offering beyond pure risk transfer,” he explained.
Ultimately, continued Higginbotham, greater efficiency leads to better risk understanding and management as well as greater speed, which in turn leads to improved capital allocation and added value for the customer.
According to Higginbotham, there are three key differentiators for Swiss Re Reinsurance Solutions as a partner for more efficiency and innovation in this fast-changing industry.
“Firstly, we are in the fortunate position to be able to draw on Swiss Re Group’s 160 years of re/insurance knowledge and its capital strength. Backing our solutions with our balance sheet makes us a reliable long-term partner.
“Secondly, with our presence in 29 countries across the world, we have a truly global team of specialists, combining industry know-how with tech talent. Our international expertise with a local touch helps us create next-generation insurance solutions with a regional focus, such as Property Insights. This is a plug-and-play property intelligence solution enhancing underwriting processes, empowering insurers to develop risk level pricing, based on global and country-specific risk data, e.g. in Australia, France and the USA.
“And thirdly, based on the nature of its business, Swiss Re has always been a data-driven company – it’s part of our DNA. Our data assets have strong value, and combined with client data and our unique range of third-party data sources, we are able to provide risk insights that help our clients achieve their business goals,” he said.
In terms of innovation and what he expects to drive this in the insurance industry going forward, Higginbotham noted that it’s hard to discuss future trends without touching on recent advances in the artificial intelligence (AI) space.
“No doubt, AI is becoming an increasingly important backbone for innovation in our industry, and we see a huge potential to increase business efficiency and help us develop new innovative solutions. While this is a promising long-term outlook, current AI-based applications in insurance are still mostly based on narrow AI, rather than general AI,” said Higginbotham.
“We see significant potential in the use of generative AI in insurance, but at this stage we’re still in an exploratory phase as we must ensure that any concrete use cases are fully in line with regulatory requirements as well as with our own rigid internal standards. It’s paramount to ensure that the underlying data is responsibly used and biased outcomes are prevented – regular and stringent validation of AI models is therefore a must.
“Ultimately, AI will only be as good as those people who develop and utilise it, and the quality of the underlying training data. The added value of AI therefore comes from the smart combination of both AI models and human processes,” he concluded.