Data is the elephant in the room: Swiss Re at the GC Baden-Baden symposium

Name the issue and the solution may be data. Talk making data into a solution and data-sharing may be the answer. Asked to speak to the broad question of “partnership”, participants in the annual Guy Carpenter Reinsurance Symposium, which kicked off Baden-Baden on October 20, circled back to data-sharing.

“The elephant in the room is us,” Andreas Berger, the chief executive officer of Swiss Re, told symposium participants.

“Human nature may be the biggest impediment to a solution.”

He went on to clarify that human nature may be the biggest impediment to a solution ready and waiting at the industry’s fingertips: data-sharing could be the solution that can make exposures fully visible. 

“Change is when you make people do things they wouldn’t intuitively do,” Berger said. “I wouldn’t intuitively give away my data.

“Human nature is to fear being manipulated or outsmarted, but it’s not always negative to share.”

Data is clearly the answer when your partner is an investor from the insurance-linked securities (ILS) space. Maria Rapin, CEO of Nephila Climate, told the listeners that “sophisticated investors are data hounds” and that they “know how to dig in”.

“More sophisticated data and modelling techniques are near the top of my list of ingredients for the ILS market to get to its next major milestone after hitting the $100 billion mark ” she added.

When investors are being asked to consider peak risk requiring a higher cost of reinsurance capital, or a gap in the market’s capacity, or a nascent risk to get their attention, there is a solution: give them data to seal the deal.

Loss creep

Data could be the answer to one core issue in nat cat: loss creep, Berger added, citing the surprising development of loss estimates for events as far afield as floods in Northern Italy and US hurricanes Milton and Helene.

“Data needs to be updated, and models adjusted.”

“The biggest topic we need to address in loss creep basically boils down to detailed description of exposure,” Berger said. “It’s causing stress in the system. Data needs to be updated, and models adjusted—the data aspect is so important.” 

Berger offered a sizeable list of warnings and industry talking points. These included another year of nat cats in excess of $100 billion with roots in asset accumulations via population growth and rising values. And that is even before the experts begin to debate climate change. 

Another concern is around US casualty where claims inflation remains well in excess of economic inflation. He also cited geopolitical tensions with “staggering numbers” in strikes, riots and civil commotion drivers.

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