Supercede report reveals 10% hike in reinsurance premiums due to ‘untrustworthy’ data
The silent crisis of unreliable reinsurance data and its significant costly implications for cedents is the focal point of a new whitepaper released by pioneering ReinsurTech firm Supercede.
To create the whitepaper, Supercede interviewed over 30 senior global reinsurers, brokers, and cedents. The subsequent findings unveiled a stark reality: subpar data is not just an inconvenience, but a significant financial drain on results. Cedents are paying the price, quite literally, through escalated reinsurance costs, diminished capacity, and missed avenues for innovation. The report’s standout revelation is the hefty ‘data distrust tax’ that reinsurers impose due to ambiguous or inconsistent data. This often translates to a highly significant 10% surge in reinsurance rates, adversely affecting both loss and combined ratios.
“’Pricing loads’ are often implicit: actuaries and underwriters will make conservative assumptions to allow for uncertainty in the data and risk,” said Hetul Patel, Chief Actuary, Liberty Mutual Re. “This will be built into the technical price.”
Further complicating the landscape, cedents delivering patchy data sets are frequently sidelined from bespoke evaluations. Instead, they are lumped into broad-stroke portfolio generalisations, missing out on tailored, more advantageous terms.
The point is supported by Tobias Sonndorfer, Management Board, VIG Re, who said: “You get a competitive advantage by providing well-structured data. If an underwriter or actuary has a pile of submissions to work through, you can almost guarantee they’ll turn to the least clear ones last.” “We believe high-quality data is essential for a well-functioning reinsurance market, but our research shows current practices fall far short,” said Ben Rose, President of Supercede. “By shining a light on the issue, we hope to motivate positive change across the industry.”
Drawing from a rich tapestry of narratives and insights from industry experts, the whitepaper is a clarion call. It champions the cause of enhancing data submission standards to sidestep punitive pricing, secure preferential terms, and harness the promise of emerging tech innovations.
To download the full report and learn about the practical solutions offered by the whitepaper, visit: https://supercede.com/reinsurance-insights-and-whitepapers/the-reinsurance-data-crisis
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