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EDITORSeptember 04, 2017
Albert Benchimol
Albert Benchimol
Efficiency Breeds Value
September 04, 2017

Insurers must harness data, technology and human capital if they are to operate more efficiently and profitably in the current environment, but as AXIS Capital’s Albert Benchimol tells EXPOSURE, offering better value to clients may be a better long-term motive for becoming more efficient. Efficiency is a top priority for insurers the world over as they bid to increase margins, reduce costs and protect profitability in the competitive heat of the enduring soft market. But according to AXIS Capital president and CEO Albert Benchimol, there is a broader, more important and longer-term challenge that must also be addressed through the ongoing efficiency drive: value for money. “When I think of value, I think of helping our clients and partners succeed in their own endeavors. This means providing quick and responsive service, creative policy structures that address our customers’ coverage needs, best-in-class claims handling and trusting our people to pursue their own entrepreneurial goals,” says Benchimol. “While any one insurance policy may in itself offer good value, when aggregated, insurance is not necessarily seen as good value by clients. Our industry as a whole needs to deliver a better value proposition — and that means that all participants in the value chain will need to become much more efficient.” According to Benchimol — who prior to being appointed CEO of AXIS in 2012 served as the Bermuda-based insurance group’s CFO and also held senior executive positions at Partner Re, Reliance Group and Bank of Montreal — the days of paying out US$0.55-$0.60 in claims for every dollar of premium paid are over. “We need to start framing our challenge as delivering a 70 percent-plus loss ratio within a low 90s combined ratio,” he asserts. “Every player in the value chain needs to adopt efficiency-enhancing technology to lower our costs and pass those savings on to the customer.” With a surfeit of capital making it unlikely the insurance industry will return to its traditional cyclical nature any time soon, Benchimol says these changes have to be adopted for the long term. “Insurers have to evaluate their portfolios and product offerings to match customer needs with marketplace realities. We will need to develop new products to meet emerging demand; offer better value in the eyes of insureds; apply data, analytics and technology to all facets of our business; and become much more efficient,” he explains. Embracing Technology The continued adoption and smarter use of data will be central to achieving this goal. “We’ve only begun to scratch the surface of what data we can access and insights we can leverage to make better, faster decisions throughout the risk transfer value chain,” Benchimol says. “If we use technology to better align our operations and costs with our customers’ needs and expectations, we will create and open-up new markets because potential insureds will see more value in the insurance product.” “I admire companies that constantly challenge themselves and that are driven by data to make informed decisions — companies that don’t rest on their laurels and don’t accept the status quo” Technology, data and analytics have already brought improved efficiencies to the insurance market. This has allowed insurers to focus their efforts on targeted markets and develop applications to deliver improved, customized purchasing experiences and increase client satisfaction and engagement, Benchimol notes. The introduction of data modeling, he adds, has also played a key role in improving economic protection, making it easier for (re)insurance providers to evaluate risks and enter new markets, thereby increasing the amount of capacity available to protect insureds. “While this can sometimes raise pricing pressures, it has a positive benefit of bringing more affordable capacity to potential customers. This has been most pronounced in the development of catastrophe models in underinsured emerging markets, where capital hasn’t always been available in the past,” he says. The introduction of models made these markets more attractive to capital providers which, in turn, makes developing custom insurance products more cost-effective and affordable for both insurers and their clients, Benchimol explains. However, there is no doubt the insurance industry has more to do if it is not only to improve its own profitability and offerings to customers, but also to stave off competition from external threats, such as disruptive innovators in the FinTech and InsurTech spheres. Strategic Evolution “The industry’s inefficiencies and generally low level of customer satisfaction make it relatively easy prey for disruption,” Benchimol admits. However, he believes that the regulated and highly capital-intensive nature of insurance is such that established domain leaders will continue to thrive if they are prepared to beat innovators at their own game. “We need to move relatively quickly, as laggards may have a difficult time catching up,” he warns. “In order to thrive in the disruptive market economy, market leaders must take intelligent risks. This isn’t easy, but is absolutely necessary,” Benchimol says. “I admire companies that constantly challenge themselves and that are driven by data to make informed decisions — companies that don’t rest on their laurels and don’t accept the status quo.” “We need to start framing our challenge as delivering a 70-percent plus loss ratio within a low 90s combined ratio” Against the backdrop of a rapidly evolving market and transformed business environment, AXIS took stock of its business at the start of 2016, evaluating its key strengths and reflecting on the opportunities and challenges in its path. What followed was an important strategic evolution. “Over the course of the year we implemented a series of strategic initiatives across the business to drive long-term growth and ensure we deliver the most value to our clients, employees and shareholders,” Benchimol says. “This led us to sharpen our focus on specialty risk, where we believe we have particular expertise. We implemented new initiatives to even further enhance the quality of our underwriting. We invested more in our data and analytics capabilities, expanded the focus in key markets where we feel we have the greatest relevance, and took action to acquire firms that allow us to expand our leadership in specialty insurance, such as our acquisition of specialty aviation insurer and reinsurer Aviabel and our recent offer to acquire Novae.” Another highlight for AXIS in 2016 was the launch of Harrington Re, co-founded with the Blackstone Group. “At AXIS, our focus on innovation also extends to how we look at alternative funding sources and our relationship with third-party capital, which centers on matching the right risk with the right capital,” Benchimol explains. “We currently have a number of alternative capital sources that complement our balance sheet and enable us to deliver enhanced capacity and tailored solutions to our clients and brokers.” Benchimol believes a significant competitive advantage for AXIS is that it is still small enough to be agile and responsive to customers’ needs, yet large enough to take advantage of its global capabilities and resources in order to help clients manage their risks. But like many of his competitors, Benchimol knows future success will be heavily reliant on how well AXIS melds human expertise with the use of data and technology. “We need to combine our ingenuity, innovation and values with the strength, speed and intelligence offered by technology, data and analytics. The ability to combine these two great forces — the art and science of insurance — is what will define the insurer of the future,” Benchimol states. The key, he believes, is to empower staff to make informed, data-driven decisions. “The human elements that are critical to success in the insurance industry are, among others: knowledge, creativity, service and commitment to our clients and partners. We need to operate within a framework that utilizes technology to provide a more efficient customer experience and is underpinned by enhanced data and analytics capabilities that allow us to make informed, intelligent decisions on behalf of our clients.” However, Benchimol insists insurers must embrace change while holding on to the traditional principles that underpinned insurance in the analog age, as these same principles must continue to do so into the future. “We must harness technology for good causes, while remaining true to the core values and universal strengths of our industry — a passion for helping people when they are down, a creativity in structuring products, and the commitment to keeping the promise we make to our clients to help them mitigate risks and ensure the security of their assets,” he says. “We must not forget these critical elements that comprise the heart of the insurance industry.”

EDITORMarch 17, 2017
Analytics
Analytics
The Analytics-Driven Organization
March 17, 2017

Over the past 15 years, revolutionary technological advances and an explosion of new digital data sources have expanded and reinvented the core disciplines of insurers. Today’s advanced analytics for insurance push far beyond the boundaries of traditional actuarial science. The opportunity for the industry to gain transformational agility in analytics is within reach. EXPOSURE examines what can be learnt from other sectors to create more analytics-driven organizations and avoid ‘DRIP’. Many (re)insurers seeking a competitive edge look to big data and analytics (BD&A) to help address a myriad of challenges such as the soft market, increasing regulatory pressures, and ongoing premium pressures. And yet amidst the buzz of BD&A, we see a lack of big data strategy specifically for evolving pricing, underwriting and risk selection, areas which provide huge potential gains for firms. IMAGINE THIS LEVEL OF ANALYTICAL CAPABILITY PROVIDED IN REAL-TIME AT THE POINT OF UNDERWRITING; A UTOPIA MANY IN THE INDUSTRY ARE SEEKING While there are many revolutionary technological advances to capture and store big data, organizations are suffering from ‘DRIP’– they are data rich but information poor. This is due to the focus being on data capture, management, and structures, at the expense of creating usable insights that can be fed to the people at the point of impact – delivering the right information to the right person at the right time Other highly regulated industries have found ways to start addressing this, providing us with sound lessons on how to introduce more agility into our own industry using repeatable, scalable analytics. Learning From Other Industries When you look across organizations or industries that have got the BD&A recipe correct, three clear criteria are evident, giving good guidance for insurance executives building their own analytics-driven organizations: Delivering Analytics to the Point of Impact In the healthcare industry, the concept of the back-office analyst is not that common. The analyst is a frontline worker – the doctor, the nurse practitioner, the social worker, so solutions for healthcare are designed accordingly. Let’s look within our own industry at the complex role of the portfolio manager. This person is responsible for large, diverse sets of portfolios of risk that span multiple regions, perils and lines of business. And the role relies heavily on having visibility across their entire book of business. A WILLIS TOWERS WATSON SURVEY REVEALS THAT LESS THAN 45 PER CENT OF U.S. PROPERTY AND CASUALTY INSURANCE EXECUTIVES ARE USING BIG DATA FOR EVOLVING PRICING, UNDERWRITING AND RISK SELECTION. THIS NUMBER IS EXPECTED TO JUMP TO 80 PERCENT IN TWO YEARS’ TIME Success comes from insights that give them a clear line of sight into the threats and opportunities of their portfolios – without having to rely on a team of technical analysts to get the information. They not only need the metrics and analytics at their disposal to make informed decisions, they also need to be able to interrogate and dive into the data, understand its underlying composition, and run scenarios so they can choose what is the right investment choice. If for every analysis, they needed a back-office analyst or IT supporter to get a data dump and then spend time configuring it for use, their business agility would be compromised. To truly become an analytics-driven organization, firms need to ensure the analytics solutions they implement provide the actual decision-maker with all the necessary insights to make informed decisions in a timely manner. Ensuring Usability Usability is not just about the user interface. Big data can be paralyzing. Having access to actionable insights in a format that provides context and underlying assumptions is important. Often, not only does the frontline worker need to manage multiple analytics solutions to get at insights, but even the user persona for these systems is not well defined. At this stage, the analytics must be highly workflow-driven with due consideration given to the veracity of the data to reduce uncertainty. Consider the analytics tools used by doctors when diagnosing a patient’s condition. They input standard information – age, sex, weight, height, ethnicity, address – and the patient’s symptoms, and are provided not with a defined prognosis but a set of potential diagnoses accompanied by a probability score and the sources. Imagine this level of analytical capability provided in real-time at the point of underwriting; a Utopia many in the industry are seeking that has only truly been achieved by a few of the leading insurers. In this scenario, underwriters would receive a submission and understand exactly the composition of business they were taking on. They could quickly understand the hazards that could affect their exposures, the impact of taking on the business on their capacity – regardless of whether it was a probabilistically–modeled property portfolio, or a marine book that was monitored in a deterministic way. They could also view multiple submissions and compare them, not only based on how much premium could be bought in by each, but also on how taking on a piece of business could diversify the group-level portfolio. The underwriter not only has access to the right set of analytics, they also have a clear understanding of other options and underlying assumptions. Integration Into the Common Workflow To achieve data nirvana, BD&A output needs to integrate naturally into daily business-as-usual operations. When analytics are embedded directly into the daily workflow, there is a far higher success rate of it being put to effective use. A good illustration is customer service technology. Historically, customer service agents had to access multiple systems to get information about a caller. Now all their systems are directly integrated into the customer service software – whether it is a customer rating and guidance on how best to handle the customer, or a ranking of latest offers they might have a strong affinity for. SKILLED UNDERWRITERS WANT ACCESS TO ANALYTICS THAT ALLOW THEM TO DERIVE INSIGHTS TO BE PART OF THE DAILY WORKFLOW FOR EVERY RISK THEY WRITE It is the same principle in insurance. It is important to ensure that whatever system your underwriter, portfolio manager, or risk analyst is using, is built and designed with an open architecture. This means it is designed to easily accept inputs from your legacy systems or your specific intellectual property-intensive processes. Underwriting is an art. And while there are many risks and lines of business that can be automated, in specialty insurance there is a still a need for human-led decision-making. Specialty underwriters combine the deep knowledge of the risks they write, historical loss data, and their own underwriting experience. Having good access to analytics is key to them, and they need it at their fingertips – with little reliance on technical analysts. Skilled underwriters want access to analytics that allow them to derive insights to be part of the daily workflow for every risk they write. Waiting for quarterly board reports to be produced, which tell them how much capacity they have left, or having to wait for another group to run the reports they need, means it is not a business-as-usual process. How will insurers use big data? Survey of property and casualty insurance executives (Source: Willis Towers Watson)

Helen YatesMarch 17, 2017
technology-dna-cover
technology-dna-cover
The Future of (Re)Insurance: Evolution of the Insurer DNA
March 17, 2017

The (re)insurance industry is at a tipping point. Rapid technological change, disruption through new, more efficient forms of capital and an evolving risk landscape are challenging industry incumbents like never before. Inevitably, as EXPOSURE reports, the winners will be those who find ways to harmonize analytics, technology, industry innovation, and modelling. There is much talk of disruptive innovation in the insurance industry. In personal lines insurance, disintermediation, the rise of aggregator websites and the Internet of Things (IoT) – such as connected car, home, and wearable devices – promise to transform traditional products and services. In the commercial insurance and reinsurance space, disruptive technological change has been less obvious, but behind the scenes the industry is undergoing some fundamental changes. The Tipping Point The ‘Uber’ moment has yet to arrive in reinsurance, according to Michael Steel, global head of business development at RMS. “The change we’re seeing in the industry is constant. We’re seeing disruption throughout the entire insurance journey. It’s not the case that the industry is suffering from a short-term correction and then the market will go back to the way it has done business previously. The industry is under huge competitive pressures and the change we’re seeing is permanent and it will be continuous over time.” Experts feel the industry is now at a tipping point. Huge competitive pressures, rising expense ratios, an evolving risk landscape and rapid technological advances are forcing change upon an industry that has traditionally been considered somewhat of a laggard. And the revolution, when it comes, will be a quick one, thinks Rupert Swallow, co-founder and CEO of Capsicum Re. “WE’RE SEEING DISRUPTION THROUGHOUT THE ENTIRE INSURANCE JOURNEY” MICHAEL STEEL RMS Other sectors have plenty of cautionary tales on what happens when businesses fail to adapt to a changing world, he explains. “Kodak was a business that in 1998 had 120,000 employees and printed 95 percent of the world’s photographs. Two years later, that company was bankrupt as digital cameras built their presence in the marketplace. When the tipping point is reached, the change is radical and fast and fundamental.” While it is impossible to predict exactly how the industry will evolve going forward, it is clear that tomorrow’s leading (re)insurance companies will share certain attributes. This includes a strong appetite to harness data and invest in new technology and analytics capabilities, the drive to differentiate and design new products and services, and the ability to collaborate. In particular, the goal of an analytic-driven organization is to leverage the right technologies to bring data, workflow and business analytics together to continuously drive more informed, timely and collaborative decision making across the enterprise. And while there are many choices with the rise of insurtech firms, history shows us that success is achieved only when the proper due diligence is done to really understand and assess how these technologies enable the longer term business strategy, goals and objectives. One of the most important ingredients to success is the ability to effectively blend the right team of technologists, data scientists and domain experts who can work together to understand and deliver upon these key objectives. The most successful companies will also look to attract and retain the best talent, with succession planning that puts a strong emphasis on bringing Millennials up through the ranks. “There is a huge difference between the way Millennials look at the workplace and live their lives, versus industry professionals born in the 1960s or 1970s – the two generations are completely different,” says Swallow. “Those guys [Millennials] would no sooner write a cheque to pay for something than fly to the moon.” Case for Collaboration If (re)insurers drag their heels in embracing and investing in new technology and analytics capabilities, disruption could well come from outside the industry. Back in 2015, Lloyd’s CEO Inga Beale warned that insurers were in danger of being “Uber-ized” as technology allows companies from Google to Walmart to undermine the sector’s role of managing risk. Her concerns are well founded, with Google launching a price comparison site in the U.S. and Rakuten and Alibaba, Japan and China’s answers to Amazon respectively, selling a range of insurance products on their platforms. “No area of the market is off-limits to well-organized technology companies that are increasingly encroaching everywhere,” says Rob Procter, CEO of Securis Investment Partners. “Why wouldn’t Google write insurance… particularly given what they are doing with autonomous vehicles? They may not be insurance experts but these technology firms are driving the advances in terms of volumes of data, data manipulation, and speed of data processing.” Procter makes the point that the reinsurance industry has already been disrupted by the influx of third-party capital into the ILS space over the past decade to 15 years. Collateralized products such as catastrophe bonds, sidecars and non-traditional reinsurance have fundamentally altered the reinsurance cycle and exposed the industry’s inefficiencies like never before. “We’ve been innovators in this industry because we came in ten or 15 years ago, and we’ve changed the way the industry is structured and is capitalized and how the capital connects with the customer,” he says. “But more change is required to bring down expenses and to take out what are massive friction costs, which in turn will allow reinsurance solutions to be priced competitively in situations where they are not currently. “It’s astounding that 70 percent of the world’s catastrophe losses are still uninsured,” he adds. “That statistic has remained unchanged for the last 20 years. If this industry was more efficient it would be able to deliver solutions that work to close that gap.” Collaboration is the key to leveraging technology – or insurtech – expertise and getting closer to the original risk. There are numerous examples of tie-ups between (re)insurance industry incumbents and tech firms. Others have set up innovation garages or bought their way into innovation, acquiring or backing niche start-up firms. Silicon Valley, Israel’s Silicon Wadi, India’s tech capital Bangalore and Shanghai in China are now among the favored destinations for scouting visits by insurance chief innovation officers. One example of a strategic collaboration is the MGA Attune, set up last year by AIG, Hamilton Insurance Group, and affiliates of Two Sigma Investments. Through the partnership, AIG gained access to Two Sigma’s vast technology and data-science capabilities to grow its market share in the U.S. small to mid-sized commercial insurance space. “The challenge for the industry is to remain relevant to our customers,” says Steel. “Those that fail to adapt will get left behind. To succeed you’re going to need greater information about the underlying risk, the ability to package the risk in a different way, to select the appropriate risks, differentiate more, and construct better portfolios.” Investment in technology in and of itself is not the solution, thinks Swallow. He thinks there has been too much focus on process and not enough on product design. “Insurtech is an amazing opportunity but a lot of people seem to spend time looking at the fulfilment of the product – what ‘Chily’ [Swallow’s business partner and industry guru Grahame Chilton] would call ‘plumbing’. “In our industry, there is still so much attention on the ‘plumbing’ and the fact that the plumbing doesn’t work, that insurtech isn’t yet really focused on compliance, regulation of product, which is where all the real gains can be found, just as they have been in the capital markets,” adds Swallow. Taking out the Friction Blockchain however, states Swallow, is “plumbing on steroids”. “Blockchain is nothing but pure, unadulterated, disintermediation. My understanding is that if certain events happen at the beginning of the chain, then there is a defined outcome that actually happens without any human intervention at the other end of the chain.” In January, Aegon, Allianz, Munich Re, Swiss Re, and Zurich launched the Blockchain Insurance Industry Initiative, a “US$5 billion opportunity” according to PwC. The feasibility study will explore the potential of distributed ledger technologies to better serve clients through faster, more convenient and secure services. “BLOCKCHAIN FOR THE REINSURANCE SPACE IS AN EFFICIENCY TOOL. AND IF WE ALL GET MORE EFFICIENT, YOU ARE ABLE TO INCREASE INSURABILITY BECAUSE YOUR PRICES COME DOWN” KURT KARL SWISS RE Blockchain offers huge potential to reduce some of the significant administrative burdens in the industry, thinks Kurt Karl, chief economist at Swiss Re. “Blockchain for the reinsurance space is an efficiency tool. And if we all get more efficient, you are able to increase insurability because your prices come down, and you can have more affordable reinsurance and therefore more affordable insurance. So I think we all win if it’s a cost saving for the industry.” Collaboration will enable those with scale to behave like nimble start-ups, explains Karl. “We like scale. We’re large. I’ll be blunt about that,” he says. “For the reinsurance space, what we do is to leverage our size to differentiate ourselves. With size, we’re able to invest in all these new technologies and then understand them well enough to have a dialogue with our clients. The nimbleness doesn’t come from small insurers; the nimbleness comes from insurance tech start-ups.” He gives the example of Lemonade, the peer-to-peer start-up insurer that launched in 2016, selling discounted homeowners’ insurance in New York. Working off the premise that insurance customers lack trust in the industry, Lemonade’s business model is based around returning premium to customers when claims are not made. In its second round of capital raising, Lemonade secured funding from XL Group’s venture fund, also a reinsurance partner of the innovative new firm. The firm is also able to offer faster, more efficient, claims processing. “Lemonade’s [business model] is all about efficiency and the cost saving,” says Karl. “But it’s also clearly of benefit to the client, which is a lot more appealing than a long, drawn-out claims process.” Tearing up the Rule Book By collecting and utilizing data from customers and third parties, personal lines insurers are now able to offer more customized products and, in many circumstances, improve the underlying risk. Customers can win discounts for protecting their homes and other assets, maintaining a healthy lifestyle and driving safely. In a world where products are increasingly designed with the digital native in mind, drivers can pay-as-they-go and property owners can access cheaper home insurance via peer-to-peer models. Reinsurers may be one step removed from this seismic shift in how the original risk is perceived and underwritten, but just as personal lines insurers are tearing up the rule book, so too are their risk partners. It is over 300 years since the first marine and fire insurance policies were written. In that time (re)insurance has expanded significantly with a range of property, casualty, and specialty products. However, the wordings contained in standard (re)insurance policies, the involvement of a broker in placing the business and the face-to-face transactional nature of the business – particularly within the London market – has not altered significantly over the past three centuries. Some are questioning whether these traditional indemnity products are the right solution for all classes of risk. “We think people are often insuring cyber against the wrong things,” says Dane Douetil, group CEO of Minova Insurance. “They probably buy too much cover in some places and not nearly enough in areas where they don’t really understand they’ve got a risk. So we’re starting from the other way around, which is actually providing analysis about where their risks are and then creating the policy to cover it.” “There has been more innovation in intangible type risks, far more in the last five to ten years than probably people give credit for. Whether you’re talking about cyber, product recall, new forms of business interruption, intellectual property or the huge growth in mergers and acquisition coverages against warranty and indemnity claims – there’s been a lot of development in all of those areas and none of that existed ten years ago.” Closing the Gap Access to new data sources along with the ability to interpret and utilize that information will be a key instrument in improving the speed of settlement and offering products that are fit for purpose and reflect today’s risk landscape. “We’ve been working on a product that just takes all the information available from airlines, about delays and how often they happen,” says Karl. “And of course you can price off that; you don’t need the loss history, all you need is the probability of the loss, how often does the plane have a five-hour delay?” “All the travel underwriters then need to do is price it ‘X’, and have a little margin built-in, and then they’re able to offer a nice new product to consumers who get some compensation for the frustration of sitting there on the tarmac.” With more esoteric lines of business such as cyber, parametric products could be one solution to providing meaningful coverage for a rapidly-evolving corporate risk. “The corporates of course want indemnity protection, but that’s extremely difficult to do,” says Karl. “I think there will be some of that but also some parametric, because it’s often a fixed payout that’s capped and is dependent upon the metric, as opposed to indemnity, which could well end up being the full value of the company. Because you can potentially have a company destroyed by a cyber-attack at this point.” One issue to overcome with parametric products is the basis risk aspect. This is the risk that an insured suffers a significant loss of income, but its cover is not triggered. However, as data and risk management improves, the concerns surrounding basis risk should reduce. Improving the Underlying Risk The evolution of the cyber (re)insurance market also points to a new opportunity in a data-rich age: pre-loss services. By tapping into a wealth of claims and third-party data sources, successful (re)insurers of the future will be in an even stronger position to help their insureds become resilient and incident-ready. In cyber, these services are already part of the package and include security consultancy, breach-response services and simulated cyber attacks to test the fortitude of corporate networks and raise awareness among staff. “WE DO A DISSERVICE TO OUR INDUSTRY BY SAYING THAT WE’RE NOT INNOVATORS, THAT WE’RE STUCK IN THE PAST” DANE DOUETIL MINOVA INSURANCE IoT is not just an instrument for personal lines. Just as insurance companies are utilizing data collected from connected devices to analyze individual risks and feedback information to improve the risk, (re)insurers also have an opportunity to utilize third-party data. “GPS sensors on containers can allow insurers to monitor cargo as it flows around the world – there is a use for this technology to help mitigate and manage the risk on the front end of the business,” states Steel. Information is only powerful if it is analyzed effectively and available in real-time as transactional and pricing decisions are made, thinks RMS’ Steel. “The industry is getting better at using analytics and ensuring the output of analytics is fed directly into the hands of key business decision makers.” “It’s about using things like portfolio optimization, which even ten years ago would have been difficult,” he adds. “As you’re using the technologies that are available now you’re creating more efficient capital structures and better, more efficient business models.” Minova’s Douetil thinks the industry is stepping up to the plate. “Insurance is effectively the oil that lubricates the economy,” he says. “Without insurance, as we saw with the World Trade Center disaster and other catastrophes, the whole economy could come to a grinding halt pretty quickly if you take the ‘oil’ away.” “That oil has to continually adapt and be innovative in terms of being able to serve the wider economy,” he continues. “But I think we do a disservice to our industry by saying that we’re not innovators, that we’re stuck in the past. I just think about how much this business has changed over the years.” “It can change more, without a doubt, and there is no doubt that the communication capabilities that we have now mean there will be a shortening of the distribution chain,” he adds. “That’s already happening quite dramatically and in the personal lines market, obviously even more rapidly.”

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