Supercede’s Rose on the changing role of data in reinsurance

Speaking to The Insurer TV at the Monte Carlo Rendez-Vous, Supercede co-founder and president Ben Rose discussed the shifting trends around the use of data in reinsurance.

Supercede has historically worked closely with cedants and their brokers, helping to prepare their data and manage deals during a placement, Rose explained, adding that reinsurers were happy participants in that.

However, he added that reinsurers are increasingly asking for more from their data because they want a live view of all their deals across their different books of business around the world.

“What we're trying to do for the reinsurers, therefore, is look at how can you get that uniform, consistent way of viewing all of your deals and all the associated data, such that you can actually make live portfolio allocation decisions during the renewals.”

The impact of parametric triggers on data

According to Rose, reinsurers have not changed their approach to handling data to incorporate parametric triggers, but they should start giving it more consideration.

He emphasised the importance of data for parametric policies, noting that they rely on an ever-growing resource of data being collected outside the industry. Therefore, sensors and Internet of Things devices will need to be widely deployed to begin incorporating such data into potential coverage options.

Rose suggested that if reinsurers want to eliminate basis risk, which is a common challenge with parametric triggers, they need to find a way to incorporate an indemnity angle into their approach.

“The biggest issue we're seeing there is that reinsurers don't have a clear enough view. Reinsurers don't have a clear enough view of their portfolios as they are happening, as they are live.”

He added that it often takes a long time to understand which policies have been underwritten and which claims need to be called upon. This lack of instant access and speed of service is one of the reasons why parametric coverage is becoming an attractive choice, by comparison.

Many aren’t in the position to use AI to look at data

Reinsurers aren’t currently using AI to look through their data because they are not yet in a position where it is needed, according to Rose.

He said Supercede’s role is to first organise the industry’s data and build fundamentals to ensure reinsurers have reliable inputs. Without this groundwork, it would be difficult to start the journey to using AI effectively.