Are your tools ready for the next major event?
Insurance companies are regulated in terms of the maximum risk they can hold in their books at any one time. This is to avoid them going bust in case a major disaster happens. By selling a book of policies to a reinsurer, part of those risks are transferred, and the insurer is open to take on more risk.
The reinsurance industry is often seen as traditional, with a heritage of processes from a time when the pace of the industry wasn’t so fast. Key features include:
- Reliance on disconnected spreadsheets for expense forecasting.
- Use of manual and time intensive processes that are prone to error.
- Too much Finance focus on crunching numbers and not enough time dedicated to driving improvements.
A reinsurer must be able to navigate a sea of change with 2 major waves of instability:
- Major unexpected events
When hurricanes in Texas, Florida and the Caribbean hit in 2017, it was up to the reinsurers to pick up a large part of the check. In this case, to reassure markets, it is critical to assess the impact on P&L quickly, which is where fast, connected planning comes in handy. Hurricanes for 2018 have already been named, and it is predicted that the severity of storms will increase in years to come.
- New deals
For a reinsurer to stay in business it needs to buy policies in bulk from time to time. This means that their books and company structure are transformed all of a sudden, whenever a new deal comes in.
Navigating a reinsurer on this sea of change can only be done with flexible business applications, that have the aptitude to adapt and keep up with the pace of business change. That application is Anaplan.
At Profit& we see that resilience, flexibility and malleability within a healthy reinsurance organisation, will help it stay solvent, protect the most vulnerable and ease the path to rapid claims pay outs.
For us connected planning is more than a set of tools, it must be an instrument for agility, part of the overall business architecture. Connected planning with Anaplan doesn’t simply answer questions now, it enables reinsurers to adapt at the pace of the 21st century economy.
With the right expertise to implement and manage your connected planning processes in reinsurance with Anaplan, the questions of ‘what, when, who and how’ can be as easy to answer as it is to ask.
Next time I will explain how connected planning in reinsurance can help to understand the cost per policy, manage integration of new books and bid faster on new deals, pivotal tasks for a reinsurer to stay fit & well.