Amlin on Open Modeling and Superior Underwriting

Daniel Stander (Managing Director, RMS) in conversation with JB Crozet (Head of Group Underwriting Modeling, Amlin).

Daniel Stander, RMS and JB Crozet, Amlin

Daniel Stander, RMS and JB Crozet, Amlin

Daniel Stander: Amlin has been an RMS client for many years. How involved do you feel you’ve been as RMS has designed, developed and prepares to launch RMS(one)?

JB Crozet: Amlin has been an RMS client for over a decade now. We are very committed to the RMS(one) Early Access Program and it’s been very rewarding to be close to RMS on what is obviously such an important initiative for them, and the market. We had liked what we heard and saw when RMS first explained their vision to us back in 2011. The RMS(one) capabilities sounded compelling and we wanted to understand these better, rather than build our own platform. We know how costly and risky those kinds of internal IT projects can be.

My team has now been trained on Beta 3 and feedback from those involved has been positive. We gave an overview of Beta 3 to all our underwriters and actuaries at our 4th Catastrophe Modeling Annual Briefing. There was a lot of energy and enthusiasm in the room. My team has now been trained on Beta 4 and we look forward to gathering feedback on their experience, and sharing this with RMS. We’re on a journey at Amlin and we’re on a journey with RMS. RMS(one) is the next phase of that journey.

DS: In what ways do you think Amlin will derive value from RMS(one)? Does it have the potential to pull your biggest lever of value creation; improving your loss ratio?

JBC: In a prolonged soft market, Amlin is rightly focused on controlling its loss ratio with disciplined underwriting. We think about RMS(one) in this context. With RMS(one), there is a real opportunity for superior performance through improved underwriting – both in the overall underwriting strategy and in individual underwriting decisions. This is equally true of our outwards risk transfer as it is of our net retained portfolio of risks.

It’s a big part of my role in the Group Underwriting function to equip our underwriters with the tools they need at the point of sale to empower their decision-making. The transformational speed and depth of the analytics coming out of RMS(one) will surface insights that result in superior, data-driven decision-making. The impact overtime of consistently making better decisions is not trivial.

DS: Transparency is key here: not just transparency of cost and performance, but transparency into the RMS reference view. How do you think about RMS(one) in this context?

JBC: RMS(one) takes the concept of transparency to a new level. RMS’ documentation has always been market leading. The ability to customize models by making adjustments to model assumptions – to drop in alternative rate sets, to scale losses, to adjust vulnerability functions – well, that gives us a far better understanding of the uncertainty inherent in these models. We can much more easily stress test the models’ assumptions and use the RMS reference view with greater intelligence.

RMS(one) is truly “open”. The fact that RMS(one) is architected to run non-RMS models – and that RMS has extended the hand of partnership to vendors of alternative views – is game-changing. The idea that Amlin could bring in auxiliary vended view of risk – from say, EQE – is today totally impractical given the operational challenges associated with such a change. RMS(one) removes these barriers and effectively gives us more freedom to work with other experts who might be able to help us hone our “house view” of risk.

DS: What is the attitude to the “cloud” in the market?

JBC: Once you understand that the RMS cloud is as secure and as reliable – if not more so – than existing data centre solutions, traditional concerns about the cloud become a non-issue. At Amlin we have high standards and we are confident that RMS can meet or exceed them.

It’s worth remembering, though, that the cloud is central to the value one can derive from RMS(one) and it’s not some optional extra – then you realize it’s not just “fit for purpose”, it’s actually what the industry needs.

RMS is giving us choices we’ve never had before. Whether it’s detailed flood models for central Europe and North America, or high definition pan-Asian models for tropical cyclone, rainfall and flood. Whether it’s the ability to scale up the compute resources on demand, or the ability to choose how fast we want model results based on a clear tariff. We wouldn’t be able to derive the broader value from RMS, if we worked with the hardware and software capabilities that our industry has been used to.

Managing Director, RMS
A Managing Director since 2012, Daniel currently has responsibility for driving content, innovation and replicable, strategic solutions across the entire RMS client base. He is also the Global Head of the RMS Public Sector Group, with overall leadership responsibility within RMS for relationships with its supranational, sovereign and local government clients. Over the last 15 years, Daniel has covered both government and corporate clients on every continent and in almost every sector, advising them across the full spectrum of RMS products on a variety of complex risks, from natural hazards, terrorism and pandemic to marine, supply chain and cyber. Prior to RMS, Daniel managed the group strategy and development function at BUPA, the 50,000 employee global health insurance specialist. He also has considerable start-up experience, having been a founding team member of an award-winning, P&C focused, SaaS company that was ultimately bought by Oracle. A frequent commentator on technology trends, Daniel has been published by Insurance Executive Technology, Risk & Insurance, The Institute of Economic Affairs and Middle East Insurance Review. He holds a double first from Oxford, studied for his MS at the Humboldt in Berlin and is a graduate of the Center of Creative Leadership.

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