Aiming to counter emerging risks, reinsurers are viewing investments in business intel and data analytics systems as vital to the sector.
Of vital importance to this sector, business intel and modeling processes are moving away from Excel-based data crunching into more sophisticated systems, such as AI and machine learning, Novarica reported.
Coming out of a prolonged soft market, reinsurers are now operating through an unpredictable business cycle, according to market researcher Novarica, which noted this has prompted a focus on technology investments around core systems, modeling and business intelligence.
Of vital importance to this sector, business intel and modeling processes are moving away from Excel-based data crunching into more sophisticated systems, such as artificial intelligence and machine learning, the market researcher reported.
In order to truly advance modeling ability, data quality and depth must first be improved, according to Mitch Wein, Novarica senior vice president of research and consulting. As a result, reinsurers are seeking more complete and accurate data from primary insurers, and are focusing on data cleansing to meet those ends.
Reinsurers are also investing to update core systems in an effort to centralize their businesses and better handle the growing number of audits and regulations. When looking to replace core systems, reinsurers are primarily seeking to centralize from spreadsheets to improve data access for reporting and auditing.
Also driving investments in core system updates are desires among reinsurers to implement the latest technology and improving users’ experiences, the research company reported.
Looking more granularly at technologies that are currently being explored, Novarica reports a growing interest in the potential application of blockchain as well as robot-based automation for processes. The latter can free up resources for value-added work, while improving cycle time and process consistency, according to Novarica.
As reinsurers’ data wealth continues to grow, particularly as more advanced systems are brought online, more sector players are starting to serve as aggregators. Novarica explained small- and mid-sized insurer clients are benefiting from this through better access to data and book of business analytics as a result of these activities.