Senior insurance execs set to jump ship to InsurTech
An increasing number of senior insurance industry executives could leave traditional insurers and join the fast-growing InsurTech sector.
That’s one of the predictions of KPMG’s UK head of insurance technology Murray Raisbeck, who says that the company’s list of the top financial tech firms globally saw a doubling of those in the insurance space in 2016 compared to the previous year.
It also means that traditional insurers will be increasingly partnering with tech firms with three main strands dominating insurers’ investment.
“Blockchain, particularly in commercial lines and reinsurance; Artificial Intelligence (“AI”) as firms increasingly utilize chat bots and virtual agents before venturing further into underwriting and claims; and the internet of insurance as our world becomes increasingly connected,” Raisbeck said.
For insurers based in the UK there will be the additional challenge of Brexit and Raisbeck believes that attracting the top talent to London will become more challenging as insurers weigh moving headquarters to Europe.
AIG completes sale of United Guaranty
The sale of AIG’s United Guaranty Corporation to Bermuda-based Arch Capital Group Ltd was completed Dec. 30 the insurance group has announced.
“We are pleased to complete the sale of UGC,” said Peter D. Hancock, President and Chief Executive Officer of AIG. “With this transaction, AIG has taken another step in simplifying our organization to become a leaner, more focused insurance company committed to our vision of being our clients’ most valued insurer.
The deal was originally announced in August 2016.
Reinsurers may become less flexible in 2017 says report
There are signs that reinsurers may be less prepared to be flexible in 2017 according to a report from Willis Towers Watson’s reinsurance division.
Willis Re reports that pricing stabilization remains a challenge for reinsurers but this appears to be happening in the US market driven by the capital intensive nature of some US classes and the very significant improvements in terms in recent years.
“The ability to produce yet another profitable year, somewhat against the underlying pricing models, has meant that the threshold to force a market pricing stabilization has not yet been reached,” commented John Cavanagh, global CEO of Willis Re.
“While reinsurers are still able to report profitable results, despite the underlying issues they face, the situation for many primary companies is much tougher,” Cavanagh added. “Rising combined ratios in many markets, driven by competition both from existing peers as well as from new style competitors utilizing innovative low cost distribution and cost models, is a growing concern.”
The report also highlights that M&A activity in the sector slowed in 2016 compared to a year earlier but that InsurTech is a growing trend.
Reinsurers are taking a stronger client-centric approach to managing their portfolios in the current market; this is leading to superficially inconsistent underwriting at a market level and fragmentation of pricing trends by territory, class and client.
“With the January 1 renewal season setting the tone for 2017, reinsurers can only look forward to another demanding year, where luck will play an even larger role in determining their final results,” concluded Cavanagh.
