Often described as insurance for insurers or stop-loss insurance. Reinsurance is the process whereby multiple insurance companies share risk by buying insurance policies from other insurers to reduce their own total loss in the event of a disaster.
The Association of Bermuda Insurers and Reinsurers highlights that Bermuda is presently the largest supplier of catastrophe reinsurance to US insurers. Bermuda insurers and reinsurers contributed an estimated $35 billion over the past 12 years in catastrophe claims payments to their US clients. ABIR notes that Bermuda is uniquely able to match risk-taking capital with licensed insurers and reinsurers and is regularly referred to as the “world’s risk capital”. As one of the world’s biggest insurance hubs, Bermudian based reinsurers have consistently utilized innovative practices in the administration of their companies.
The reinsurance industry however, has recently undergone a series of mergers and acquisitions driven by the need for growth and due to a decline in returns produced for their shareholders. Efforts are increasingly being put forth to modernize reinsurance administration. Reinsurers are looking to leave behind manual processes and outdated technology with insufficient analytics capabilities. By modernizing core IT systems reinsurers can substantially reduce operating costs, improve processing speed and minimize errors.
Although we have only slightly highlighted some of the benefits of modernizing core IT systems, the potential for increased profitability and productivity is immense. If you would like to learn more about how Bermuda Microsystems can assist in your modernization efforts than speak with us today.