I wondered for a long time why the world’s largest Reinsurers are very active in the InsurTech world.
The Reinsurers are the biggest beneficiaries of the current situation and any change may cause them a financial damage
True, it is clear that the Reinsurers understand that the insurance field is changing in these days but why they invest so much time and resources to promote the change that could cause them losses
It is clear that underwriting results will lead to greater profit for the Reinsurers. But we see that the Reinsurers invest not only in the underwriting field but also in the area of service, quality of insurance coverage, contact with customers and more.
I have a hypothesis I’m not sure it is correct but when I introduced this hypothesis to managers at Reinsurance companies I saw that they did not reject it.
My hypothesis is interesting but simple – the reinsurers seek through the new technologies to reach to the end customer directly in the near future
At this day, the reinsurers’ customers are not the insured but the insurance company. The reinsurer must pay to the insurance company a high commission, as well as to the brokers. The InsurTech, in order to enable them to get to know the end customers (the policyholders) better and later on, will let them be in direct contact with them (the policyholders), reducing their expenses and improve the underwriting and to realize their profits
A similar phenomenon occurs today in many countries around the world. Insurance companies around the world seek to sell directly to the policyholders and skip many products from brokers, thereby achieving the same goal that reinsurers want to achieve in the future.
As the insurance companies do today to brokers/agents, the reinsurance companies will do this in the future to the insurance company. The world is round