The reinsurance industry is missing out on the benefits of digital transformation while the rest of the insurance industry surges ahead with modernisation, according to new research published by Supercede, the fast-growth global reinsurance placement platform.
Supercede’s new whitepaper, ‘Reinsurance That Connects – why reinsurance needs a standardised data platform’, combines the company’s own research with insights from leading reinsurance experts across the market to assess the challenges posed by the lack of common data standards within the industry.
“The volume of data that cedents and actuaries have to process is proliferating at breakneck speeds. However, the industry is trying to manage 21st century data using 20th century processes that require huge amounts of manual labour and are subject to human error. As a result, reinsurance businesses are leaving a vast amount of value on the table,” writes Dr Paul Bassan, Supercede’s Chief Actuarial Officer.
The whitepaper identifies the top risks posed by the lack of common data standards, including lack of data integrity, increased risk exposure, opportunity costs and lost revenues, and even reputational damage that could lead to restricted market access. According to the industry experts who contributed to the paper, the top challenges of gathering and processing data are caused by data volume, data complexity, and data completeness. The paper also explores the significant potential benefits of applying a consistent approach for data entry and validation for cedents, brokers, and reinsurers, which it claims would solve many of the current risks and opportunity costs arising from poor quality data.
Beyond the immediate benefits of time saved and better contracts, the paper’s expert contributors agreed that a more uniform approach to gathering and sharing data would act as a springboard for innovation and collaboration that could transform the efficiency and profitability of the sector. The whitepaper also examines the key obstacles the industry needs to overcome in order to make common data standards a reality, including outdated legacy back-office systems, and the need for increased cooperation between cedents, brokers, and reinsurers.
“Creating a data standard is no easy feat, but the rewards in doing so will be abundant,” said Ben Rose, President and Co-founder of Supercede. “Whilst this poses a challenge for those in the reinsurance ecosystem, it also presents an opportunity for change.” The paper calls upon cedents, brokers, and reinsurers to join the conversation and start to work together on making common data standards a priority for the industry.