Kleiterp says IPs not up to scratch and in need of rebooting

Fred Kleiterp, regional CEO, EMEA at Swiss Re Corporate Solutions, says the existing customer experience with global programmes is still not “up to scratch” and needs to be rebooted to help risk managers deal with the currently highly volatile and uncertain modern global economy. In a recent blog post, Mr Kleiterp argues that technology provides the answer to tackling the many inefficiencies that still plague international insurance arrangement and placement, as well as providing the transparency and clarity that risk and insurance managers want and need. “In too many cases, the customer experience of international insurance programmes isn’t up to scratch. But with the whole industry – carriers, brokers and customers – on board, we can reboot it for today’s fast-changing and increasingly uncertain world,” says Mr Kleiterp. “Let’s act now to improve efficiency and give customers the service they deserve. Above all, we want to make the world more resilient. By taking a data-driven approach and addressing industry inefficiencies, we believe we can do just that,” he adds. Mr Kleiterp says that in today’s complex world, companies face many challenges when they seek to insure global assets. Because they operate across different jurisdictions, they have to deal with a confusing set of local policies with varying degrees of cover. International insurance programmes offer the opportunity to take a consistent approach to risk management, gain more certainty and achieve cost savings – an element that is particularly important in today’s hardening market as most companies seek to cut costs as they grapple with the economic crisis caused by Covid-19. Unfortunately, however, there remain are a number of inefficiencies in the way that international programmes operate and this can be particularly challenging for the rising number of smaller and medium-sized companies that need cross-border coverage. “Traditionally the preserve of major multinational corporates, such programmes are now being purchased by mid-sized and even smaller companies as they expand their business, supply chains and financial assets into different countries across the world,” says Mr Kleiterp. “However, these smaller organisations face substantial challenges in implementing international policies. For example, many struggle to prevent local offices buying policies from non-programme entities, and there can be higher costs involved in such a setup,” he continues. Mr Kleiterp says that, for insurers, the challenge is to quantify risks in parts of the globe where they may have no previous experience. Creating a standardised policy wording to cover all jurisdictions is a major technical challenge. Swiss Re Corporate Solutions is trying to tackle this problem by developing industry solutions together with partner insurers such as Stuttgart, Germany-based Württembergische Versicherung. Mr Kleiterp says the key is to overcome the multiple problems presented by the use of legacy systems to deliver a connected industry platform based on cloud computing with API connections. “Some more established insurance companies rely on legacy systems with processes that have been pieced together over time, as well as conflicting technologies that simply do not talk to one another,” he explains. “To overcome the inefficacies in these legacy systems, which can cause process frictions including delays in settling claims, we need to leverage today’s technological advances such as cloud computing to build open and connected industry platforms with API connections to achieve end-to-end integration. Other industries are demonstrating the power of such architectures,” adds Mr Kleiterp. “International programmes involve sharing a great deal of data, much of it unstructured. By structuring data consistently, all parties have a full picture of the risks they are insuring and the cover they are receiving,” he continues. Mr Kleiterp says that it is, of course, possible to use solutions such as artificial intelligence to sort out this mass of unstructured data. But, he argues, the only way to make things simpler and more cost effective is to automate the process from end to end. “Above all, international programmes need to be fast, accurate and transparent – and this can only be achieved by deploying technology and data standards,” he says. Transparency for all parties is another critical element of overcoming the problems associated with international programmes. “Contract certainty is a prerequisite for ensuring coverage is complete across all territories. Put simply, customers need to be able to see what risks are covered and where. Again, technology has a critical role to play by making policies transparent on a single platform. But addressing customers’ pain points is about more than just standardising policies, vitally important though that is. It’s also about using data to understand and price risk more accurately, wherever in the world our clients operate,” explains Mr Kleiterp. “As insurers we are seeing the same trends – reduced capacity, the need for better underwriting discipline and rising insurance rates. But if we can work together and share technology to innovate and stay one step ahead, there is much cause for optimism,” he adds. “We want to make this process simpler and more agile. And we need to better understand the risks we are insuring. As investment returns diminish globally, improving underwriting profitability across the industry will be ever more important,” continues Mr Kleiterp. To tackle these challenges, Swiss Re Corporate Solutions has designed and built a platform that it believes is appropriate for today’s world and the future. The International Programme Administration platform (IPA) combines technology with deep risk insights in a single platform to address the needs of customers and eliminate inefficiencies, according to Swiss Re. The system supports the reinsurer’s insurance customers and is now also on offer to brokers and other insurance companies, such as Württembergische. In this latest case, the German insurer will have access to Swiss Re’s network of more than 150 local office and network partners as of 1 January 2021. “This will help it grow its corporate business book while delivering structured and compliant multinational programmes to its customers,” says Mr Kleiterp. IPA will also allow Württembergische to use Swiss Re’s ONE Form standardised property policy framework. This, according to the insurer, delivers higher policy accuracy, increased contract certainty and faster processing – wherever in the world their customer is operating.

Kleiterp says IPs not up to scratch and in need of rebooting

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