Jun 23, 2021

Munich Re: COVID-19 has not defeated reinsurance

MunichRe
Reinsurance
covid-19
Insurance
4 min
Paul Donnelly, EVP at Munich Re, details the lessons reinsurers have learned throughout the pandemic and why the industry’s future is still positive

There can be little doubt that COVID-19 has dealt a heavy blow to reinsurance, with Q1 of 2021 alone incurring an estimated US$4.4bn of claims. However, according to Paul Donnelly, EVP EMEA at Munich Re Automation Solutions, though it might be shaken, the industry is far from beaten.

In charge of overseeing the provision of MRAS’ life insurers with systems and services to help digitise POS, Donnelly has a complex understanding of the region’s various markets, from Oslo to Cape Town, Dubai, and Dublin. We spoke with him on reinsurance’s future and areas for growth still available.

Q. Reinsurers have met high claims costs in Q1 because of COVID-19. What will be the global roadmap for recovery?

While claims may of course have an impact on the profitability of any insurance or reinsurance business, you should not lose sight of the fact that claims are the concrete validation of the purpose and social value of our industry.

Let me underscore one of the unusual aspects of our industry: the longevity of many of the key players in the industry. Munich Re Automation Solutions is part of an organisation that has been in business for over 140 years. 

I was recently looking back at the life insurers my unit has helped over 2020/21 to implement state-of-the-art digital journeys for onboarding their customers. That list includes MetLife, Generali, Helvetia & Prudential, all businesses that are older than Munich Re. 

This highlights both the ability of the industry to take a longer term view than one quarter or year as well as the roadmap forward through adopting the latest technology to constantly improve CX.

Q. What lessons have (or should have) reinsurers learned from the pandemic?

Traditionally insurance (and life insurance in particular) has complex products and the differences between them are too subtle for many applicants to navigate. As a result, an advisor or insurance broker nearly always had to meet the applicant face-to-face.

However, the pandemic has woken the industry up to the idea that this may not always be possible, and the journey needs to be digitised. Therefore, this demands a much more streamlined process, ensuring that any required underwriting information is captured in one session to avoid the use of follow-on questionnaires on the applicant’s medical history or pastimes. 

For example, the US market is rich with third-party data aggregators. These provide extraordinary levels of detail for application information during the underwriting processes, ranging from driving history to the use of prescription medicines.

As pandemic restrictions are eased and the industry continues showing signs of recovery, we expect global insurance businesses to follow suit and embrace a digital focused mindset. 

While traditionally a relationship-oriented industry, the need for physical interaction in underwriting is withering. As a result, we expect that the savvier insurers will be implementing augmented automated underwriting systems, leveraging machine learning and AI capabilities.

Q. Are there still significant areas for growth in reinsurance, or should the sector refocus on consolidation and value?

As society evolves and our commercial and personal interactions become more nuanced and complex, the opportunities to play a supportive role for insurers grow. There are constantly new risks that businesses and society must overcome and each new risk provides an opportunity for insurance and reinsurance to demonstrate its value.

Let me give you an example from my non-work life: I am based in Ireland and outside of my role at Munich Re, I am chairman of Ireland’s leading acute hospital, St. James’s Hospital. In May, Ireland’s healthcare system suffered the most significant ransomware cyberattack in its history. I am told the likely cost of this attack will be €100mn. 

This is a risk that was practically unheard of 10 years ago and yet we are highly cognizant of it today. Enabling businesses to navigate risks such as this with confidence presents both an opportunity for insurers and reinsurers to demonstrate their worth, as well as a business growth opportunity for them.

Q. Have you observed a refocus around CX recently?

For a long time there has been a cohort of insurers that have sought competitive advantage through tech adoption, providing seamless CX and user journey. What has changed in recent months/years is that this is now no longer a “nice to have”, but has become what my US colleagues call “table stakes”. 

The digital-native insurance customer of today demands an elegant customer experience, and will not accept the clunky user journey that the life insurance industry has been riddled with for decades. In some markets during the pandemic, the broker community is also “voting with its feet” and reevaluating their relationships with carriers based on the user experience provided to them as intermediaries.

Special thanks to Paul Donnelly for taking part in this Q&A

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Jul 23, 2021

The Ultimate FinTech & InsurTech LIVE Event

Fintech
Insurtech
live
event
3 min
Where innovation meets implementation, coming to you live from London

Whether you attend virtually or in person, it will give you the chance to network with C-Level executives, share ideas with industry pioneers, and walk away with actionable, unique insights to bolster your business and career. 

By the end of the three-day event, you will have seen the latest innovations in both FinTech and InsurTech. You will be able to see how companies like yours are tackling the problems that keep you up at night, engage in a community that many struggle to access, and share your ideas with people who care as much as you do. 

Order your tickets now to take advantage of our limited-time Early Bird offer. 

 

How can you attend?

 

In the post-Covid era, not everybody wants to travel for events. So FinTech and InsurTech Live will be completely hybrid. That means you can attend the event in person or virtually - with no disadvantages to people who don’t make the trip to the Tobacco Dock. 

 

In-person

 

FinTech and InsurTech Live is happening in the Tobacco Dock in London, a ten-minute walk from Tower Bridge. For more information on the location, click here

 

Virtually

There’s no need to worry about missing out if you choose not to attend in person. You can still absorb all the information, interact with other attendees and enjoy the conference experience on our virtual platform. 

There will be live feeds from all of the stages (also available on-demand after the event) as well as virtual networking areas. So not being able to travel is no reason to miss your chance to gather with the industry.

 

What’s on the agenda? 

 

With keynote addresses from global leaders, dynamic roundtable discussions, and extensive networking opportunities, FinTech & InsurTech 2021 will expand your network, deliver insight, and enhance your organisation’s reach. 

Across the three-day event, a number of relevant topics and trends surrounding fintech and insurtech will be discussed. 

 

  • Tuesday 14 October - Diversity and Inclusion
  • Racial equality (11:30 am)
  • Supplier diversity (12:00 pm)
  • Sustainability (12:30 pm)
  • Women in fintech (14:30 pm) 
  • Wednesday 15 October - Challenger and neobanks 
  • Cashless society (14:00 pm) 
  • SMEs (14:30 pm) 
  • Thursday 16 October - Adopting new-age digital solutions in the insurance industry (06:00 am)


Influential executives from around the world will give their insights and professional experiences surrounding these topics, allowing you and your company to leave with valuable information. 

The topics surrounding digital transformation should certainly be on the mind of every executive after the events of 2020 and how we all had to adapt to meet customer’s needs. Creating a digital roadmap is key, and making changes to the traditional ways of working. Customers now have new needs, and keeping up to speed with the digital changes, whilst also doing so safely, are important. 

If you want to get leading perspectives on the future of fintech and insurtech, you can purchase your tickets here.

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