New models of reinsurers and insurers will emerge in the not too distant future, with the lines between them blurring as interconnectedness grows both within the insurance sector and outside it, said speakers at a panel discussion held at the Singapore International Reinsurance Conference yesterday.
Pointing out that there will be more consolidation of the roles of these players, Mr George Kesselman, founder of InsurTech Asia, said: “We will see a ‘hybrid’ period of quasi insurers/reinsurers, which will be more general in their roles, consume less value and which may take the shape of a multi-role entity.”
He said that reinsurers will move closer to the forefront of risks, and engage more at the distribution level, together with startups and new players. “Rather than wait for someone to send the risks to you, they would ask, how do you enable (covering) new types of risks?”
Another panelist, Mr Anthony Hobrow, CEO of consultancy NexAssure Group, said that a fundamental shift that the industry will need to get used to is that the focus of insurance will shift from human error to machine error and technology-focused people will be the ones driving change. For instance, in motor, insurance will shift from driver to manufacturer. Operations, processes and legal contracts will be automated, and insurance wordings will be prepared via artificial intelligence.
He noted that in tandem, the skill base that is required within an insurance organisation will shift enormously too--and not just at a junior level. ‘How many people in the boardroom really understand blockchain?” he asked, citing the challenges.
Ms Natasha K Mak-Levrion, Founder and Managing Director of PPEARL Consulting, who was also a panel speaker, said that the (re)insurance industry will be looking out for computational thinking skills to make meaning of the vast amounts of data efficiently, with a view to shift “from insight to foresight”. The workforce will also shift from a mainly transactional nature to advisory functions, where the opportunities will be much greater. “Providing solutions, not just products, will be the key differentiator,” she said.
Separately, Mr Peter Hacker, Co-Founder & Partner, Distinction.Global, InsurTech opinion leader and author, said that technology and automation are moving at a pace that humans cannot match. “Disruption in the insurance and reinsurance industry has become the new normal. Anything that cannot be automated will be extremely valuable in the future,” he said, in a special keynote address yesterdayat the SIRC. He mentioned here that creativity, intuition, emotion and ethics will be of immense value in the future.
Intangible assets and risks
Mr Hacker pointed out that, today, market capitalisation is driven by intangible assets. He said that while the conventional property and casualty risks will remain, the future will be dominated by mobility and intangible assets. “From an insurer’s point of view there are huge opportunities because as the more the risk becomes intangible, the higher will be its severity,” he added.
The three-day 14th SIRC ended yesterday.With the SIRC turned into an annual event from this year and next taking place from 30 October - 1 November 2018, the East Asian Insurance Congress will be held in Manila from 6–9 May 2018 instead of its customary calendar slot late in the year.
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