Loss ratios and efficiencies are key drivers for technology adoption

(Re)insurers need to better prepare to adopt technology to make the best use out of data and new insights that will become available to them.

Loss ratios and efficiencies are driving a lot of the behaviour the market is seeing around the use of technology and are important drivers to maintain momentum, said John Racher, vice president and head of UK operations at AdvantageGo.

Speaking to The Insurer on the terrace of the Fairmont Hotel in Monte Carlo, he said, “I think the new solutions that are out there, particularly around decision support and data driven underwriting are going to have a massive impact on efficiency loss ratios and the cost of transacting business in the marketplace.

“These are all technology driven initiatives and I think that’s going to be a key part of carrier solutions going forward,” he added.

On the subject of efficiency and whether or not the market could be considered to be in a “better place”, Racher said that it can be a difficult question to answer.

“I think probably you can say that it is, but it’s difficult to actually measure that against anything concise,” he told The Insurer.

Nevertheless, there is momentum. “I think a lot of the recent things that are happening in the market around Placing Platform Limited (PPL) – we’ve seen a quarter of a million risks bound through PPL recently - shows there is definite transition and definite progress as far as technology in the market is concerned, and certainly there’s a bit interest in seeing where that tech is going to take us in the next few years,” said Racher.

To maintain momentum, (re)insurance adoption of technology will continue to be a really important topic, said Racher, but there will be both winners and losers.

“I think that operational efficiency, driven through technology is going to be a key part of technology adoption during the course of the next few years and I think that (re)insurers that do not make use of that will not progress as well as others that do.

“It’s fair to say that technology itself is going to continue to improve and accelerate and the data and technology that is available will be best used by those carriers that are prepared to adopt that technology,” he said.