The Past 4 Years Have Exposed the Urgency of Modernising Reinsurance Platforms (1 of 5: Process)
Blog Series 1 of 5
In our opening Whitepaper for this series, ‘Business Case for Reinsurance Administration Automation’, we discussed the two major disruptive forces that have forever changed the reinsurance market: natural catastrophes and COVID-19. In 2021 alone catastrophe losses surpassed $100 billion and $450 billion in aggregate since 2017. When it comes to the life insurance market, COVID-19 has increased life insurance purchases by 32%. On the property and casualty side, the American P&C Insurance Association forecasts that COVID-19 claims will reach $1 trillion a month.
With such staggering numbers, the complexity of each process becomes overwhelming. Furthermore, as reinsurance programmes are becoming more and more sophisticated, so too are the complexities of each process. A reinsurance programme can consist of a mix of proportional and XOL treaties, including facultative protection, with various layers and attachment points, inuring rules and terms and conditions. Such complex programmes only weaken the link of the process chain, making them more vulnerable and isolated from the whole process. So it has become inevitable: reinsurance processes need to be fully automated with fewer people involved.
We have also seen how consumer behaviour has changed over the last 2 years with COVID-19 making everything accessible online, fast, and delivered to your door, a standard we all should live up to. Modernising reinsurance platforms is therefore inevitable and will simplify the whole process, thus dramatically decreasing the room for human error while fulfilling consumers’ new standard expectations.
Modernised reinsurance platforms should improve both customers’ and insurers’ experience with a simple, intuitive user interface with a workflow that is based on configurable rules. A full view of all treaties and layers of the process will minimise the loss of data, prevent claims leakage and enhance operational efficiency. Navigation through the platform should be simple, with access to all data along the process and streamlined end-to-end reinsurance claims processing for all stakeholders involved.
Since each policy necessitates interaction with third parties, the reinsurance platforms should be able to integrate with third-party service providers and enable full flexibility and functionality that simplify complex processes.
The last four years have accelerated the need for insurance processes to be simplified. If, prior to COVID-19, there was still a question of whether and when we should modernise our insurance platform, the last few years have solved that dilemma for us. The question is no longer if or even when; at this point, the sooner we catch up with the business expectations the greater our chances to stay in the game.
To learn more about how you can modernise your insurance platform, click here.
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