Management Consulting

The reinsurance industry is currently facing significant challenges in leveraging data and analytics (D&A) effectively. Many reinsurers are still heavily reliant on outdated spreadsheet methods, which hampers their ability to make informed decisions. A study by Aon’s Strategy and Technology Group revealed that most reinsurers are not capitalizing on the potential benefits of available data, particularly from granular bordereaux reports. This reliance on manual data cleansing and generic management information results in inefficiencies and delays in critical processes such as pricing, reserving, and capital modeling. To address these issues, a tailored solution was proposed that involves developing a comprehensive data and analytics strategy and roadmap. This includes investing in advanced D&A capabilities to enhance risk selection and portfolio optimization. Best-in-class reinsurers are moving towards integrated systems that eliminate the need for manual data entry and rekeying, thereby streamlining operations. They are also focusing on building dedicated D&A teams that not only serve their internal needs but also create revenue by offering D&A solutions to other entities. The results of implementing these strategies are quantifiable. Reinsurers that have adopted advanced D&A practices have been able to outperform their peers by making quicker and more informed risk management decisions. For instance, one data-driven reinsurer that invested early in property catastrophe D&A was able to differentiate its risk assessment, leading to the establishment of a market-leading portfolio. This proactive approach to data utilization not only enhances underwriting efficiency but also improves client relationships by providing valuable insights that support better decision-making. Overall, the investment in D&A is expected to yield significant dividends across improved risk selection, enhanced underwriting efficiency, optimized portfolios, and a stronger client proposition.