The third edition of the International Insurance Forum (IIF) series was dedicated to the property (re-) insurance issues: “The Nat Cat challenge”. Over 70 participants from 13 countries have attended the event organized by NTT DATA and XPRIMM, hosted by NTT DATA in Germany, in Munich.
Under the moderation of Michael Theilmeier, Vice-President of GEN Re Germany, and Romeo Jantea, Insurance Specialist, XPRIMM, EMEA experts specialized in property insurance joined the debates and the interesting panel discussions.
Michael Theilmeier underlined, that man-made catastrophes were in focus during recent years, with an increased accent on terrorism. In these conditions, less than 30% of the total losses were produced by NatCat (Natural Catastrophes) and are worldwide insured losses. Depending on the level of economic development of the countries, the degree of penetration of Cat insurance and property insurance is very different. As well, we can see an increase in number of loss events since 1980, the property insurance gap is slowly decreasing worldwide. Because of the massive country investments in prevention measures – flood, fire, explosions or other catastrophes, the customers see no need for individual and extra protection.
There are many examples in this matter:
A flood reinsurance scheme is offered by FLOOD Re to promote flood insurance in the UK, as it has been set up to help those households from a high flood risk area to find affordable home insurance. In Germany, uninsured properties will not be offered compensation from the state in case of a disaster, unless the owner can prove, that he sought coverage and was unable to obtain it from the insurance carriers. In Italy, only 1% of the earthquake affected households in 2016 were insured well enough.
For other countries, like Romania, selling mandatory household insurance policies through brokers is one way to increase the penetration ratio. Self Service and digitalization are another ways of selling insurance. As a consequence of the needs of the young generation Y, digitalization will rise as well in the insurance industry. Most likely, digitalization will support a better Nat Cat risks’ management. Dominik Lorenz told, that insurance companies estimate that 40% of customers are annoyed by a lack of online services, according to a NTT DATA study. According to insurers participating in the same study, only 30% of customers are interested in giving data to insurance companies for “pay-as-you-drive” rates. Even over 50% of the younger people under 35 are open to share their data for a better and cheaper support or smart protection offerings. Insurers have to change their culture and their processes based on digitalization. Long-terms goals for most of the global insurance companies are to develop alternative distribution channels – and support their Omni-Channel sales. A very interesting discussion on a panel is showing, that insurance jobs will change, the intermediaries have to be more flexible and the way of communication and data analysis will go digital.
In conclusion, the IIF has shown that there are many challenges for the NatCat insurance and digitalization will be part of the solution to face the challenges. The feedback of the participants is, that you can only manage the future with mutual cooperation and online services. NTT DATA will be happy to welcome even more insurance experts at the next IIF in 2018.
For the presentations and the photo gallery, please check the event’s website.
See the videos of the IIF this year in Munich on Facebook: https://www.facebook.com/xprimmmediaxprimm
See the NTT DATA digital portfolio for insurance: https://digital-insurance.nttdata.de/