Solve your expense ratio problems in months not years
The global insurance market is facing its Kodak moment. Those who fail to innovate run the risk of being left behind. Across the insurance ecosystem, costs need to be cut, and innovation is no longer optional.
In a market awash with capacity, reducing the expense base is critical. For too long, the insurance industry has struggled to get to grips with the expense challenge, dogged by legacy technology systems which only serve to increase the cost to the end customer.
The problem has now come to a head. Large catastrophe losses have exposed the poor margins being earned across the insurance industry, and capital targeting the re/insurance market has meant the booms seen in the traditional insurance cycle have been flattened.
The consequences of inaction could be catastrophic.
Lloyd's understands the importance of reducing its expense ratio
This problem is also being faced by Lloyd’s, the world’s oldest insurance market, where the past 12 months have highlighted the need for cost reduction.
The expense ratio across all Lloyd’s syndicates in the first half of 2018 was 39%. Lloyd’s management team have made it clear that this is not a sustainable number and Lloyd’s is asking each syndicate for an action plan to show how expenses will be reduced.
Where London leads, others must follow, and the expense drive will become increasingly prominent across international insurance and reinsurance markets in 2019 and beyond.
Blockchain can deliver a 30% insurance expense ratio improvement
Many technology solutions have attempted to improve efficiency over the years, with mixed success. We believe blockchain technology can help deliver the cost savings and efficiency gains that are critical to the future growth aspirations of London and international insurers.
A study by ChainThat and global blockchain leader R3 has estimated that blockchain could deliver annual operational cost savings to the global reinsurance industry of up to $50bn
ChainThat’s blockchain technology works to remove frictional costs across the ecosystem involved in the placement, claims management accounting and settlement of insurance transactions, including those placed via broker facilities.While at the same time offering a secure mechanism for transactions between insurance counterparties and ensuring that ownership and control of the data is retained by market participants.
Innovation means creating value - fast
Our platform’s pre-built components can be quickly leveraged to configure a solution, across different aspects of the value chain from placement, accounting to settlement and claims, that can help (re)insurance carriers and brokers fulfil their innovation agenda, meeting the challenge in a few months rather than a few years.
The platform enables shared data and processes as all partners see the same version of the truth, eliminating data management and coordination and reconciliation costs.
Across the ecosystem and value chain, this can bring savings of 30%, benefiting (re)insurer, broker and insured.
Now is the time to act on expenses. Failure to do so will make it difficult to remain competitive, and could ultimately put the future of your business at risk.