No ‘big bang’ disruption in insurance: Munich Re

While there is no doubt that the insurance industry is changing dramatically, Torsten Jeworrek, chief executive officer, reinsurance, of Munich Re, does not expect that the insurance sector will experience a “big bang” type of disruption.

It is clear, however, that only those who embrace new challenges and understand that they have to innovate will stay relevant for the clients, and insurtechs will be playing a role here, Jeworrek said.

Change in the insurance industry will be brought about by the industry itself, which will incorporate all the possibilities of data and digital into its products and processes, he explained.

“Insurtechs will develop new technologies which will improve or replace certain parts of the traditional value chain. That is why close cooperation between startups and established insurance companies makes a lot of sense,” Jeworrek said.

Munich Re is looking to work with clients to navigate the changing world of risk and find opportunities to grow in this space.

“This could mean introducing clients to new technologies or startups as potential strategic partners. Or it may mean co-developing new products with clients to meet an emerging need.

“Our goal is to work with clients to help them shape their own and the industry’s future,” he explained.

Big data and analytics allow the industry to efficiently process losses with low volumes and high demand rates, he said.

“Thanks to this, insurance can be offered that was previously considered unprofitable or difficult to assess in terms of its risk,” Jeworrek said.

This could, for example mean more attractive covers for certain types of diabetes, or performance guarantees for wind farms, he explained.

Processes and information could be amalgamated in order to transfer some underwriting elements to automated risk management platforms, he continued.

“With the aid of artificial intelligence workflows for example, it is also possible to develop applications which enable the early recognition of losses such as fire damage,” he noted.