Why the current challenging insurance market 'is going to favor the bold'

 

In 2023, the insurance industry seems to be plagued with the same problem again.

The economic impact of the COVID-19 pandemic remains painful for many businesses, and natural disasters seem to get worse each year (in fact, Guy Carpenter recently reported that global losses from natural He announced it could reach $112 billion). It continues to put pressure on the market. While large insurers may be able to weather the impact of these issues, the same cannot be said for smaller insurers.

How can underwriters navigate this difficult period?

Insurance Business once again turned to Insurtech Accelerant CEO Jeff Rake (pictured) for insight into the current state of property and casualty insurance and his company's plans to support insurers during this difficult time.

Can you tell us about yourself, your route into insurance – and the core responsibilities of your role at Accelerant?

I have worked in the field of primary insurance and reinsurance for decades. All this time has given me perspective on all sides of how painful and costly the industry is to participants and their customers.

Financially, emotionally, and in service. I believe much of that pain and expense stems from the outdated technology used to run the business. The industry is trying to run everything from day-to-day operations to the backend on an old stack of legacy technology.

Monday through Thursday was spent fighting data gremlins, and it felt like he only had one day to serve customers on Friday. It's really soul crushing. Luckily, I've realized that I and many other experienced and forward-thinking insurers have a unique starting point to actually do something to make specialty insurance better. To. That's why we founded Accelerant in 2018 and that's our goal today.

As CEO of Accelerant, I am responsible for his mission to create the 21st century risk exchange and make insurance fundamentals work better for everyone. On one side of our platform are professional underwriters. We are redefining their experience and making their jobs easier, faster and more rewarding. These specialist underwriters are the unsung heroes of this industry. They best understand policyholder niche needs, but too often face challenges such as unpredictable capacity and lack of data to make decisions.

On the other side of the platform are investors who bear the insurance risk. We improve the customer experience by providing high-fidelity portfolio exposure data with full transparency across the value chain and fair risk sharing with our venture capital partners.

Accelerant has an amazing team to bring this ambitious vision to life. We have assembled a team of experts to ensure that the service we provide to professional underwriters and venture capital providers is second to none. We are also constantly adding colleagues to our team. We recently announced the addition of Paul Little to our board of directors. Together we are rebuilding one of the world's oldest and still most important industries.

With a new year upon us, where would you say the US P&C market currently stands ?

The two main drivers of change are natural disasters and inflation/interest rates. Losses from natural disasters in recent years are much higher than in the past. This has led venture capitalists to explore specialty insurance, especially low volatility products, on a larger scale than ever before. We believe this momentum is largely responsible for the significant rise in venture capital rates in Accelerant's portfolio.

Inflation is driving up costs in most markets and reducing underwriting profitability across the insurance industry. We are all feeling the pressure as customers seek savings as insurance premiums rise accordingly. This dynamic makes technology-driven operational efficiency even more important.

This environment favors the brave. You can't just bury your head in the sand and carry on as usual. This momentum has been building for his nearly ten years. Small, owner-controlled businesses will be connected by efficient technology to transmit data across value chains, moving beyond large, monolithic enterprises that cannot or do not want to modernize. Do you think the segment has fully recovered after years of the pandemic?

Many would argue that the inflationary environment we are facing is a result of our response to the pandemic. As such, the impact is still very strong on the industry. The industry as a whole feels the difficulty of securing human resources.

You can imagine the tedium of most jobs in the industry sitting on piles of old data. There is also the term "swivel chair". The act of taking information from one system, turning your chair, and supplying the same information to another system that cannot communicate with the first system.

One thing is clear: in this era of social and economic change, the best companies with the most agile and data-driven strategies are ahead of the rest of their industry.

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