This week´s guest on The Voice of Insurance podcast is Jean-Paul Conoscente, CEO, SCOR Global P&C, the Property and Casualty (P&C) Business Unit of SCOR. Speaking to Mark Geoghegan, Jean-Paul talks about price adequacy, the impact of Covid, insurtech, data and algorithmic underwriting, and the main issues affecting the reinsurance market today and in the run-up to the 1.1 renewals.
The last time Mark spoke with Jean-Paul, he was running SCOR´s North American P&C operations. Since then, Jean-Paul has been promoted to CEO of SCOR Global P&C and elevated to the executive committee. Kicking off the discussion, Mark asks Jean-Paul about what we can expect with him at the helm. Jean-Paul replies that SCOR´s philosophy and approach to clients hasn´t changed since he became CEO and that clients can expect more of the same.
The conversation soon turns to the state of the market with Mark asking if Jean-Paul is happy about rate adequacy; Jean-Paul replies: “First of all, reinsurers are never happy, but overall, the market is very fragmented, so rate adequacy really varies by geography and by line of business. We think we´re getting better rate adequacy in some European markets. We´re getting decent rate adequacy on the insurance side; on reinsurance, we´re still very cautious in the US and feel that rate adequacy is not quite there yet on US casualty and US property as well as on the European casualty. I think there is still a way to go on the rate adequacy.”
Covid, still a key topic in the industry, has Mark commenting on how SCOR has taken a more partnership approach on the pandemic. Speaking about Covid, Jean-Paul discusses how SCOR has taken a responsible manner to how claims are assessed and that engaging in constructive dialogue with clients has been vital: “I think the clients appreciated the fact that compared to other reinsurers who rejected them outright, we engaged with them and actually had a constructive discussion with them.”
Speaking about market growth, especially within the context of risks such as climate change and cyber, Jean-Paul says: “I think as an industry we have to make sure that we at least have a business model that is able to produce a sustainable profitability.”
Mark asks how far algorithmic underwriting can go up the insurance value change and how much can be automated. Jean-Paul discusses how the lack of wording standardisation can potentially be a danger to automate underwriting: “I think it really is related to the commoditisation of business, so I think if there is a line of business that is very commoditised, it lends itself well to algorithmic underwriting as long as the wordings are standardised. That´s been an issue for the industry for many years; the wordings are not standardised… so relying on algorithmic underwriting when each wording has a little twist to it that you can´t pick it up in the algorithmic underwriting is very dangerous.”
As the conversation moves to data and data sharing, Jean-Paul raises the question around the commercial incentive for insurers and brokers to share data, which remains an industry problem. “I think as a reinsurer we definitely try to create a partnership, but I think the issue is not just between insurers and reinsurers it´s also between the insurance companies and their insurance.
Whereas an insured if an insurance company comes to you and asks millions of questions, you´ll go to another one that only asks five questions. And so I think that if you put yourself into the shoes of the customer, you want something that´s easy. I think the real solution to this is the use of external data that can supplement the standard information we receive and have a much better view of risk by aggregating this data together. I think in my view that´s the real solution for the industry, to have a better view of risk.”
Enjoy the podcast.
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