With the rise of natural disasters and the explosion of high-quality local data, risk managers and captive owners need to consolidate at a faster pace increasingly complex datasets to obtain timely actionable insights. Jacqueline Legrand, CEO of Maptycs, believes that the only way to do it right is to invest in performing and flexible technology.
Captive Review (CR): What challenges do risk professionals face managing property risk exposure?
Jacqueline Legrand (JL): Climate change is causing unprecedented weather volatility, and the property insurance and reinsurance markets have experienced a rise of catastrophic losses. To gain an accurate picture of their property risk exposures, risk professionals need to consolidate in real-time increasingly sophisticated datasets developed by governmental agencies and third-party providers.
As a result, there is an explosion of high-quality external data developed by expert data companies using new technologies such as satellite imagery and AI to provide location intelligence data. However, the industry is challenged as existing systems cannot process efficiently high volumes of data in multiple formats to support risk management, underwriting, reserving, risk mitigation and event-response strategies.
Maptycs is a geospatial solution for property risk exposure management, climate risk assessment and real-time weather events monitoring. The platform manages property portfolios’ data combined with ‘à la carte’ location intelligence third-party data. Maptycs is intuitive and can be used in standalone mode or connect with existing systems via APIs.
CR: Do we finally see risk management getting increased influence in the board room?
JL: The main objective of risk management is to understand, analyse and address any type of risk to make sure organisations work effectively and safely. Risk management is still about risk identification, mitigation and the risk landscape; however, it has also dramatically transformed because of globalisation, climate change and technology.
Natural and man-made threats are more complex and pervasive than ever before, and the impact of large-scale events on business continuity and reputation is putting risk managers in the spotlight. The insurance market volatility is particularly tangible for cybersecurity and property risks, with premiums on the rise and coverage narrowing down.
In hard markets, sound risk management is critical. Climate change, cyber risks and the ripple effects of the pandemic on the economy are prompting companies to bring risk management front and center and implement a risk management culture in their organisations.
The risk manager is gaining increased visibility at board level and this perimeter is broadening with the need to access and manage complex risk data to include ESG components and to explore alternative risk transfer solutions such as captives or parametric insurance to close the gaps and cover ‘difficult to insure’ risk at economically acceptable costs.
CR: With risk managers increasingly looking into alternative risk transfer solutions, how can technology help them get a better grasp on their risk exposure?
JL: Risk managers have traditionally relied on in-house tools, risk management information systems or spreadsheets. The main objective was to track claims and policies in a safe and structured platform. With the inefficiencies of these tools to assess risk and the lack of staff in their teams, risk managers are often dependent on their insurance providers when it comes to data collection, risk analysis, loss prevention requirements and risk transfer solutions.
Technology is about helping professionals perform their jobs better, not to replace the old with new, which is an outdated view of technology, as an equipment play versus a business performance play. The modern approach of technology is about integrating smoothly with the existing systems and processes, to support the professionals and their business objectives.
New technologies allow them to quickly and easily combine and analyse very large internal and external datasets and make better decisions with web-based solutions that are easy to implement. It is a great opportunity for risk managers and captives to take control of their risk assessment, retention and transfer strategies, to reduce dependencies on the market and premiums cost volatility, to communicate with senior management and to better negotiate their premiums renewals.
CR: At the end of the day, everything comes back to data. What do you think are the key enablers to optimise internal and external data resources?
JL: The industry is ripe for innovation to better navigate a fast-changing risk landscape, and technology will be a key enabler to optimise the use of internal and external data and help risk professionals to make better and faster decisions in all aspects of risk management. Raw data doesn’t have much value – insights have value – and insights result from good data, combined with relevant technology and people expertise. The truth is that there is a long path from data to information to insights.
Data must be constantly captured, cleaned, organised, updated and augmented before one can glean smart insights. Current, complete and consistent data is key for risk managers for risk identification, risk mitigation and risk transfer to the insurance markets to get good terms and conditions. Data, expertise and technologies to combine multiple datasets and get smart insights are increasingly available to the industry.
The next step is to find ways to share the various expertise, data and technologies that exist across the value chain for the benefits of all stakeholders. With the growing complexity of risks and the explosion of external data, technology today can do much more than just deliver information: it can deliver insights. If you know how to implement it, that is. The market is moving fast from information technology towards insight technology. And trust me when I say that nobody will look back.
CR: You mentioned that technology will be a key enabler. What is important to ensure a successful implementation?
JL: It is important to look at technology as a business decision rather than an IT equipment decision. Technology is capable of almost anything in the range of reason. Modern solutions are mostly cloud-based, so concretely it is without IT implementation risk per se. As a result, decisions should be based on the business benefit rather than the technology implementation aspects. Key outcomes are to add value and speed to the team’s daily work.
There are no perfect systems, however, the most important element is the flexibility to adapt to the reality of operations. User friendliness and performance are key to get everyone onboard and happy. When we developed Maptycs, we focused from the outset on the user experience and the performance.
Overall, the platform is designed as a modern application where all data and features are accessible from one main screen without a specific workflow. The benefit is that there is no need for long training as the platform is intuitive and adjusts to the various ways of working. This is the foundation for fast user adoption and instant value-add gratification.