Insurance is a tough marketplace, but in many respects reinsurance is tougher! Today, the reinsurance industry is faced with an unprecedented number of challenges especially with what appears to be an increasing frequency and severity of man-made and natural catastrophes. To combat these challenges, reinsurers are turning to technology for catastrophe modelling, data analytics and geospatial information systems (GIS) to better understand the data and risk exposure.
It is a maxim that “data is the lifeblood for insurers”, but more often than not it’s not about how much data , it’s about how smart you are with the data. While it is true that a reinsurer has access to much less data regarding a particular reinsurance transaction than the ceding company does, it is also the case that reinsurers do have tremendous amounts of data in their possession. Yet many are not utilizing this data to the fullest extent. One exception is Munich Re.
One of the world’s largest reinsurers, Munich Re, is taking advantage of the large amount of data now available to the organization to innovate though a big data analytical environment from SAS. Using in-memory technology makes it possible for Munich Re to interactively analyze large quantities of data to discover unrecognized correlations and patterns. According to Munich Re’s CEO, Torsten Jeworrek, “With these new analytical technologies, we are considerably enhancing our global ability to combine our customers’ data with our own findings and expert knowledge”.
Reinsurance is very complicated, but continuing with the status quo and not full utilizing the new data sources available hampers a reinsurers ability to understand its business. Reinsurers that excel in analytics will have an advantage against their less-advanced competitors.
For more information about how analytics can help reinsurers, download the white paper “Art and Science of Reinsurance”.