The third is a shift in global economic power, as countries like China
become stronger. And the fourth is demographic and social change,
as the workforces continues to age in several countries, altering
workplace risk dynamics.
In order to cope with these factors, Moore said that PwC has
identified four pillars that the chief risk officers of the future need
to bear in mind. First, insurance companies need to make the best
use of new technology. Second, they need to make the best use of
data and advanced analytics. Third, they need to utilise the skills and
capabilities of their workforce to their best advantage. And last, they
need to create a corporate culture that gives them an edge in taking
on all of the aforementioned future challenges.
Another issue highlighted by PwC is technology, which it claims is
the biggest worry for reinsurers, as the industry struggles with legacy
PwC’s “Reinsurance Banana Skins 2019”, the seventh edition of
a survey that has been published since 2007 and featured in the
September edition of Bermuda:Re+ILS, concludes that technology is
now the industry’s biggest headache. Cyber risk is the second-biggest
worry, having ranked third last time.
According to PwC, this reflects the wider insurance industry’s
concern about the pressing need for business and technology
“There has been a huge technological shift that changes the
exposures that reinsurers are facing,” said Moore in Monte Carlo.
Citing worries about legacy systems, the survey’s 320 respondents,
spread across 42 territories, said they were particularly worried
about the costs and uncertainties associated with finding the right
However, given Bermuda’s history of innovation, few would bet
against its assuming a leading role in the technological revolution and
turning this pain point into an opportunity.
Arthur Wightman is PwC’s territory leader for Bermuda. He can be
contacted at: email@example.com
Andy Moore is global insurance risk and regulatory leader at PwC
UK. He can be contacted at: firstname.lastname@example.org
Arthur Wightman Andy Moore
“Certainly it’s an interesting aspect of the market and we are
keeping an eye on whether existing modelling techniques are
satisfactory in the light of this, or whether there are some other
issues at play that are resulting in companies not being able to work
out their losses quickly, and then for that loss to be stable over time,”
On a more macro level, he said that disintermediation is continuing,
as brokers and reinsurers start to take on some of each other’s roles.
“We are seeing more of the brokers positioning themselves more
in the reinsurance space, and the reinsurers offering analytics and
solutions that might traditionally have been in the broker space,”
he said. “That has been precipitated by a period of lower returns
and companies looking to find ways to grow their business without
necessarily a lot of aggregate overall market capacity growth.”
PwC also foresees changes in the nature of insurance, particularly
in the world of risk, over the next decade. That’s according to Andy
Moore, global insurance risk and regulatory leader at PwC UK, who
also spoke to Bermuda:Re+ILS in Monte Carlo.
Moore said that companies need to stop looking in the rear-view
mirror and instead look ahead at the risks that will emerge around
2030. His comments echo PwC’s report on the future of risk, published
in September 2019, in which the company set out its view of how the
insurance risk function will develop.
“We want to be in the position where the chief risk officer is
looking forward and charting a course so that insurance companies
can navigate the road and get to their destination safely,” Moore
said. “The report looks at some of the disruptors, such as climate
change and workforce for the future—all of which are impacting
Looking at technology, Moore said that assisted intelligence,
which facilitates the automation of repetitive, standardised or timeconsuming
tasks, is now being adopted by many workforces. PwC
foresees that augmented intelligence, whereby humans and machines
collaborate to make decisions, will emerge around 2030, and then
fully autonomous intelligence may emerge after that.
As well as changes in technology, PwC sees four other factors
impacting the way that risk is evaluated. The first is rapid urbanisation,
the mass influx of people into the world’s cities which may lead to
a spike in crime. The second is climate change and resource scarcity.
“There has been a huge technological shift that changes
the exposures that reinsurers are facing.” Andy Moore