Insuranceciooutlook

How data analytics Influences the Reinsurance Sector?

By Insurance CIO Outlook | Monday, December 16, 2019

Advanced analytics enables the reinsurers to streamline their internal processes with an increased capacity to process the vast repositories of data.

FREMONT, CA: The technology-driven transformations in the insurance industry have been slow. However, the industry is catching up the game with modern applications and systems. Reinsurance is one such aspect of insurance that is under constant transformation. With an increase in pressure on margins, the reinsurance sector is eyeing to utilize advanced data analytics solutions.

Reinsurers had to cope with partial data from their clients, thereby making it difficult for the reinsurers to understand the complete picture. Now, technology is enabling the reinsurers to access massive volumes of data. Thus, the modern challenges for reinsurers are also transforming. For instance, the huge availability of data needs to be filtered and analyzed to extract useful insights from them. Data processing has traditionally been performed through add-on tools, spreadsheets, and even on paper. However, the manual approach involved in the above case often resulted in errors, discrepancies, and inaccuracies.

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Modern reinsurance firms realize the potential of data analytics that will not only enable them to gather and analyze data conveniently but also enable them to manage the risks. It is getting increasingly obvious that human resources can’t match the results from robust data analytic tools. An advanced analytics solution can also aid in forecasts and the identification of trends by offering quicker and improved analytics capability.

 

Various companies are still using legacy systems and spreadsheets to manage their reinsurance processes. Moreover, reinsurance teams, business partners, various internal documents may all be placed in disparate repositories. Thus, the first step towards the implementation of a modern analytics solution will be the journey from manual to automated data analytics that captures all the data for companies and subsidiaries within an organization.

The above transformation will require building feeds from various claims sources and primary policies into one centralized data repository. Such a system will automatically interrogate various claims transactions and policy and perform the automated verification and attachment of reinsurance cessions based on dates, terms, and user-definable criteria designed for reinsurance arrangements. 

Insurance firms have realized the essence of data analytics to improving their reinsurance sector and are incorporating the technology to enhance their data processing capabilities.

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