The re/insurance market faces a number of key challenges in the near future, including the question of if they want to be the Blockbuster of the market or the Netflix, according to Anthony Rettino founding principal & portfolio manager at Elementum Advisors.
Speaking at a panel discussion entitled ‘Accessing Risk – Shortening The Value Chain’ at the 2018 ILS Convergence conference on Bermuda, Rettino said: “We all remember Blockbuster – they had great distribution, great locations – and in twenty years they were obsolete. Then Netflix turns up and it survives because it provides value.” Rettino concluded that the challenge for industry was a simple one – did they want to be Blockbuster or Netflix?
According to Rettino those companies that enable more efficient data collection for underwriting and claims are going to have the broadest impact, but that you can’t replace underwriting – only enable it by using artificial intelligence and more standardised data collection as well as more transparency and technology like drones.
He added that there was a lot of angst in the insurance market at the moment as various companies consider their place in that market and what it will take to keep them there. In addition he said that there are going to be a lot of casualties along the way due to data strategies that are overly focussed on cost and not value – hence the Blockbuster/Netflix comparison.
“There’s a lot of M&A going on at the moment and MGAs will see consolidation across insurers and brokers across the industry and other parts of the chain. You also see wholesale brokers buying MGAs. The world is obviously changing.”
Bermuda, ILS Convergence 2018, Anthony Rettino, Reinsurance, Challenges, Elementum Advisors