The exposure management solution of choice for many (Re)insurers

London market underwriters are facing a range of challenges as the world emerges from the COVID pandemic. Chris Wilcox who focusses on client development at Verisk Specialty Business Solutions looks at some of the core issues for underwriters concerning exposure management which has quickly climbed up the corporate agenda.

The last two years have seen some fundamental shifts in the way in which the world has been forced to operate and with it have come new complexities for the insurance sector as global supply chains and operating models have come under intense pressure. Those external pressures come with market change as London looks to redefine its processes.

As the recognised home for specialty risks (re)insurers may well have their home in the square mile, but their risks are truly global. With the rising use of delegated authority and coverholder business the market is at a crossroads as to how it can use technology and systems to manage its future more effectively. For underwriters, these long standing challenges are getting higher priority on corporate agendas.

Underwriters need to have the ability to better analyse exposure to both geographic and non-geographic risks. It is only with a full understanding of risk aggregation across the book can underwriters effectively apply their own view of risk. The use of delegated authority business is also increasing as (re)insurers look to use coverholders and MGAs to access new risk areas as clients’ needs develop.

With a growing and evolving portfolio generated from multiple distribution channels, managing exposure is now a key function for (re)insurers. However, it is still hampered by the delivery of inconsistent data and the errors inherent with re-keying.

Corporate exposure management requires greater automation of input and output of data to deliver greater uniformity of analyses which can then be used by underwriters, actuaries and claims teams. To achieve this, technology needs to deliver in three key areas:

• Flexibility to cater for multiple lines of business, with the ability to add new lines quickly to respond to changing demands
• Speed and efficiency of data capture to ensure near real-time analytics and minimise input errors
• Validation and augmentation of data through integration with third party providers

Impact, Verisk’s award winning deterministic exposure management solution answers all three of these.

In the 8 years since first release, over 60 carriers and intermediaries have licenced the product. Lines of business captured include traditional classes like Property, Offshore and Onshore Energy, Political/Credit Risk and Terrorism, more recent lines such as Cyber and niche classes like Bloodstock and Accident & Health.

Lines of business can be quickly configured to record all the necessary data required and intuitive screens capture all the intricacies of the most complex policy terms and conditions.

Integration with multiple policy administration systems (PAS) ensures that data is only keyed once and kept in sync across the various platforms. A suite of API’s provides more comprehensive data capture, allowing automated input of policy terms and conditions and location schedules of values.

Internal reference sets are used to validate data being captured, including location address details and offshore assets. Further APIs are available to call out to third party data providers to augment the submitted data with building characteristics, natural catastrophe hazards, local flood data and many other sources.

The Specialty Business Solutions team at Verisk has been developing and delivering their exposure management solution working with over 60 client (re)insurers and intermediaries, continuously asking the market what they see as the key deliverables.

Resoundingly one of the first is the ability to manage exposure aggregation at delegated facility and individual carrier level as well as producing regular reporting. Sequel Impact automatically integrates with many policy administration systems (PAS).

(Re)insurers say the need to manage cross operation exposure information across multiple lines of business is now becoming a challenge they can no longer ignore. As such they are looking to augment data through APIs, and for their exposure management platform to be available as a managed service via the cloud. Most have now moved off spreadsheets. This is viewed as the new normal in exposure management, rather than an aspiration for the future.

Clients have also recognised the importance of experience and quality of support provided by the Sequel product suite teams.

Apart from quantifying total risk exposure in real time, (re)insurers want a tool that allows underwriters to overlay simulated events such as hurricanes with pinpoint risk analysis, as well as portfolio wide exposure management, to manage predefined underwriting capacity limits and enable greatly enhanced PML management.

That demand has seen flexible data augmentation at the point of schedule import and a seamless interface with client PAS systems and cat modelling tools embedded at the heart of Sequel Impact.

London based and International (re)insurers now have comprehensive real-time exposure management data for multiple classes of business, delegated facilities and at insurer level with Sequel Impact.

The London market is working towards real process reform and using technology to reduce frictional costs and significantly enhance the ability to accurately identify, analyse and price ever more complex risks.

The market continues to evolve and as underwriters seek solutions to the challenges they currently face, they need to work with a partner that not only understands the market but has the capability and experience to identify the short, medium, and long term requirements and create the solutions to ensure a future challenge does not become a current crisis.