SUNDAY
15.10.17
News
Lack of new capital will mean bigger rises
Not that less money entering
the industry is a bad thing,
Millette said. “If anything, the
activity should be limited. There
were several new companies with
great teams and plans launched
after Katrina backed by private
equity. Few subsequently
succeeded in going public, which
was their original objective.”
He acknowledged that, while
some investors have reacted
nervously to the recent losses, most have been
keen to reinvest post-loss, despite widely varying
estimates from modelling firms. Loss estimates
from Hurricane Maria ranged between $15
billion and $85 billion (from different modelling
agencies) in the aftermath of that storm. Investors
appear to have accepted that level of uncertainty
Michael Millette
(Continued from page 1) “I believe property-cat
pricing will go up more than people predict,”
Millette said. “Total losses from the recent
hurricanes could reach around $90 billion,
although it is still hard to say how much exactly,
yet we are now seeing money entering the
industry on the scale we have in the past. There
are now new launches and equity positions are
not being taken in existing companies.
“In addition to amounts lost, trapped capital
will withdraw additional billions of capacity from
the market. People need to factor that into their
calculations when they consider rates. There is
little to dampen rate increases at the moment.”
He also believes that the rate hikes could extend
beyond the core property-catastrophe lines. He
noted that the losses will also have an impact on
commercial lines, energy and marine business.
“They will see some firming as a result,” he said.
in the immediate aftermath of
the storm.
“The recent storms have
certainly uncovered the challenges
risk modelling agencies face;
seeing the range in some of the
estimates was surprising. It proved
that certain types of loss are
hard to calculate and uncovered
all sorts of nuances in terms of
what we actually know and can
calculate.
“We also discovered that there is little agreement
on what is covered in Puerto Rico,” Millette said.
He added that the recent losses and subsequent
rate increases in some lines will rebalance the
relative attractiveness of different areas of the
market, with natural catastrophe and other
property lines gaining on a relative basis. n
Aon Benfield partners with CLARA analytics on AI
Aon Benfield, the global reinsurance
intermediary and capital advisor of Aon,
has established a partnership with CLARA
analytics to deliver cutting-edge artificial
intelligence (AI) tools to workers’ compensation
insurers in the US to help employees return to
work as quickly as possible, while decreasing loss
ratios and improving operational efficiency.
Research from CLARA has found that
just 5 to 10 percent of claims drive 90 percent
of the costs. Delayed identification of these
priority cases can lead to unnecessary litigation
and prolonged medical treatment: for example,
attorney involvement can increase the cost per
claim by more than $25,000.
To address this challenge, CLARA and
Aon Benfield have partnered to help claims
operations rapidly make the right decisions for
injured workers through predictive analytics
and AI. The tools include PUMA, which rapidly
connects injured workers to the right medical
providers; and CATT, to help claims managers
focus their team’s effort in just a few minutes
on priority cases that have the highest potential
to have variability in customer experience
and economic outcomes to the carrier. This
is based on machine learning algorithms that
provide insights through ‘pattern recognition’
based on the dataset.
George deMenocal, president and CEO of Aon
Benfield US, said: “For carriers balancing C-suite
and board level interest in innovation and cost
management, CLARA can be a quick and easy
win with minimal impact to expenses. CLARA’s
analytics will be complemented by Aon InPoint to
improve claims outcomes and develop AI platforms
to gain operational efficiencies for insurers.”
In addition to supporting insurers, the
partnership is also delivering benefits for
corporate companies with self-insured retentions
that provide direct support to their employees.
CLARA’s tools are designed to adapt easily
into an insurer’s or company’s existing claims
workflow while reducing costs to provide a
notable return on investment. This is a core
part of Aon and CLARA’s joint distribution
strategy, combining mutually complementary
resources, to optimise the value created using
CLARA’s tools for Aon’s clients, prospects and
trading partners.
Paul Mang, the global CEO of analytics for
Aon, noted: “The ability of Aon Benfield to bring
the power of CLARA analytics to its clients is a
great example of how Aon is partnering in the
insurtech space.
“Aon’s innovation process goes well beyond
developing new value propositions with its existing
data and tools—we are working actively with the
best ideas coming from universities, startups and
other large organisations to collaboratively bring
products and services to our clients.
“We believe this open architecture innovation
model will provide us a sustainable advantage
as we compete to bring the best ideas to the
marketplace.”
Jayant Lakshmikanthan, president of
CLARA analytics, added: “We are excited about
the opportunity to work with Aon Benfield and
empower its clients’ claims teams to transform
the way workplace injuries are handled.
“Key decisions such as finding the right
doctor for an injury, or prioritising claims, can be
tough to make without science-based tools. Our
mission is to deliver easy-to-use tools to adjusters
and supervisors that are built upon cutting-edge
AI technologies.
“The partnership with Aon Benfield will help
us realise this mission faster.” n
4 | PCI TODAY | DAY 1: Sunday October 15 2017 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com