At this year’s RVS in Monte Carlo, the conversations have gone beyond the topic of rates and pricing, shifting to the broader evolution of the industry itself, Jim Bichard, Global Insurance Leader at PwC, stated in an interview with Reinsurance News during the yearly event.
He continued: “A much bigger topic has been the deals environment. What’s happening both in legacy and the life environment. In fact, there’s just more M&A already happening and we expect to see more of it, and we have a big role to play.
“We also believe that the industry needs to innovate and evolve more, and those are really big topics for us and our conversations at this year’s RVS.”
Bichard stressed that the nature of risk is changing at a rapid pace due to technology, macroeconomic shifts, and geopolitics. As the industries and individuals change so too must what the re/insurance industry covers, the executive highlighted.
To illustrate the industry’s need for change, Bichard used the energy sector as an example. He argued that as the energy industry transitions to greener fuels and net-zero, the re/insurance products it needs are also different.
He said: “The energy industry is going through a huge transition, and every part of it is experiencing big changes. That means that we’re going to have a lot more battery power, a lot more solar farms, for example. And the insurance industry’s response to that needs to be about protecting provision of energy, protecting the fact that you’ve got enough power for what you need to do for your business.
“So, arguably the insurance industry needs to be about insuring against power outages or third party liability around batteries, or actually providing advice on resilience so that you don’t have a power outage in the first place, or you don’t get hacked or you don’t have a cloud outage.
“But right now, that’s not what we’re doing. What we’re doing is providing property coverage for power plants. And that’s very, very different. So, how we evolve, because the industries we serve are evolving, that’s where we have to get to.”
In order to evolve, the re/insurance industry needs to recognise how and where value is being created, “value in motion” as the executive explained, in order to find new ways, and adapt insurance offerings to protect that new value.
While the need for change is clear, Bichard warned that the industry’s progress has been small, and believes that the industry is still catching-up, focused on modernising with existing technology.
He said: “Change has started, but in really small amounts. I think most of the industry is still trying to catch up, to modernise with existing technology but just deploying it. So, moving to Cloud, digitising. But largely, this is fixing what they’re doing today to serve today’s customers. Not many, if any, are really thinking about fixing forward or anticipating what’s going to change.”
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