Cloud Hosting

Fundamentally, the cost of producing insurance products remains too highbut this could be transformed by evolving technologies, including generative artificial intelligence (gen-AI) and quantum computing. This will in the long term allow the industry to automate activities that today require human intervention, look at a significant amount of data and derive conclusions, and consequently to assess and price risk better. All this could help the industry in closing the protection gap.

This is the view of Moses Ojeisekhoba (pictured), chief executive officer of Global Clients and Solutions at Swiss Re. An advocate for embracing new technology, he told Intelligent Insurer that gen-AI and quantum computing are very much evolvingand they have the potential to transform parts of the industry.

He added that it will be important to build understanding and trust around such technologies. Digital trust is super-important. You can build it and hope they will come, but sometimes you build it, and nobody comes. The main difference between those two outcomes is trust.

More technology can support greater resilience in society, Ojeisekhoba says, and it can also play a key role in narrowing the protection gap in certain areas.

Our vision is to make the world more resilient. Moses Ojeisekhoba, Swiss ReSome of the biggest reasons for the protection gap can be addressed through advancements in technology. Things such as access, affordability, product designthese are all areas where the application of technology allows you to design products in a completely different way, he explains.

Such developments could make insurance much more affordable and enable insurers to reach people in a different way, addressing the issue of accessibility, he adds.

Quantum computing, for example, once fully operational, is expected to enable re/insurers to use the full spectrum and volume of data that is available today and in the future. This will allow re/insurers to derive much more accurate solutions, he says.

Almost everything we interact with has dataset capture in one form or another. Quantum computing will significantly advance the ability to synthesise this data so that you can build scenarios to determine the right pricing.

This will make the product better priced and much more affordable, somewhere down the road. It is not going to come tomorrow but we can clearly see the paths.

Such improvements will allow the industry to address things such as contract certainty where theres been leakage over time, in first party as well as in third party coverage.

Generative AI allows you to apply it to digital contracts and address the topic of leakage, Ojeisekhoba adds.

Swiss Re is investing significantly in gen-AI and is making sure that the reinsurer acquires the right datasets, he says. We are early adopters of this advancement and trying to find a way to ensure that we can improve the product set that we make available to our customers.

These developments are timely in todays challenging world, although Ojeisekhoba believes the re/insurance industry has proved its resilience in the face of adversity.

If you take whats been thrown at the industrywhether its a natural catastrophe, or macroeconomic challenges, geopolitics or broader socioeconomic issuesso far, the reinsurance industry has been resilient. We work extremely hard to ensure that we can anticipate some of the headwinds to ensure that our resilience continues to be in place, he says.

Such testing conditions have brought tailwinds in the form of a much greater public and client understanding of the need for more re/insurance cover. This has pushed up demand. Meanwhile, interest rate rises have bolstered investment yields, strengthening net income as well as the overall balance sheet.

A strategy of resilience

Addressing the needs of clients and partners in the context of the protection gap sits at the heart of Swiss Res strategic framework, says Ojeisekhoba.

Its not just about risk transfer, its also about understanding the risk.When we look at the broader environment, our vision is to make the world more resilient. To do that we need to address the protection gap and ensure that theres enough cover for people who need it.

That means helping clients grow their businesses, and address growth- and profitability-related issues, often driven by the need to transfer risk or for greater risk insight.

We are focused on making sure that we have the strength of balance sheet to provide capacity to our clients, and to ensure that the intellectual property we generate, combined with our technology, can be extended to our clients. We want them to have resilience in their respective businesses, Ojeisekhoba explains.

Swiss Re applies this strategy across the entire insurance value chain. Its not just about risk transfer, its also about understanding the risk. For partners, its one of the main reasons for our existence. Thats a significant part of what we do in terms of our relationships with our clients, he says.

Weve spent a significant amount of resources, financial and otherwise, trying to understand risk better and build assets that allow us to deal with the risk.

This work goes beyond traditional risk transfer to provide insights, as well as risk partnerships, which Ojeisekhoba refers to as the other two legs of overall strategy at Swiss Re.

As an example, he points to property insurance and natural catastrophes, where clients have questions for their customers that include: Are they building in the right places? Do they understand their risks when they build? If a loss occurs, How do they assess that damage relatively quickly?.

Swiss Re provides insurance capacity for nat cat on a global basis, and it continues to grow the capacity that it deploys globally, but what Swiss Re offers its clients goes beyond capacity, Ojeisekhoba says.

He says that Swiss Re has assets, for example its web-based natural hazard analysis and mapping tool, CatNet, that it provides to clients for any particular risks they may have.

They lock the location of that risk in and CatNet gives them geospatial information that tells them the risks that exist, and allows them to understand how they should underwrite that risk and how to price it.

If a loss occurs, the reinsurer can deploy rapid damage assessment capabilities, which include drone, satellite and plane support that can map the area of damage relatively quickly.

It helps our clients very quickly determine where they should send a loss adjuster, as well as the degree of damage incurred at individual risk and portfolio level.

These types of risk insights are part of the overall value chain, Ojeisekhoba says, adding: We are not just providing capacity and paying claims, we do so much more.

Did you get value from this story?Sign up to our free daily newslettersand get stories like this sent straight to your inbox.

Swiss Re, Moses Ojeisekhoba, Global clients, Solutions, AI, Technology, Insurance, Reinsurance, Global

Read the rest here:
AI and quantum computing could transform the protection gap ... - Intelligent Insurer