Enterprise Risk Management Technology Guide 2019 :: Software Alliance: Powering the next generation of insurance modelling

Software Alliance: Powering the next generation of insurance modelling

Instead of relying on legacy systems, Guy Shepherd, chief executive of Software Alliance, argues there is a better way to deliver financial modelling, analysis and decision support for insurers

What are the key modelling issues facing insurers today?

Guy ShepherdMany of the issues being faced today are the consequence of decisions taken, or not taken, more than 15 years ago. While insurers were obviously only able to base their technology decisions on what was available at the time, the almost continuous regulatory change agenda since then has provided little time for optimisation or consolidation of systems and process. IFRS 17 is just the next in a long line of regulatory changes forced upon an industry with an already significant technology debt.

The risk and governance environment have changed dramatically over the same period, with consumers and providers now very wary of about how data is stored and used.

And while the industry continues to demand more actuarial skills, the global population of actuaries is actually shrinking. Some analysis suggests there are insufficient actuaries to support the ongoing needs of IFRS 17, which is rather worrying.

Obviously, technology can help matters, through improved performance, governance or automation, but this means addressing the technology debt that exists within most insurers.

The first generation of modelling platforms appeared 20-25 years ago, and while those platforms were a revelation at the time, the needs of insurers have changed significantly. With increased demand for transparency, granularity and control, the suitability of these, now legacy tools must be in doubt.

Given the regulatory, risk and modelling challenges insurers face, how can Software Alliance help?

Our core philosophy is to focus on the modelling problem space and integrate our technology with the rest of the insurance enterprise.

The tools and technologies we offer are designed to support any of the modelling or calculation requirements faced by a typical insurance company, from front office illustrations, through to back office serving, and everywhere in between.

Our vision is to have Mo.net as the core calculation engine across the insurance life cycle. The benefits of doing that include economies of scale, performance and a single version of the truth.

What new software and services is Software Alliance planning to launch over the next year?

Our current focus is to expand the footprint of Mo.net into new markets and to provide customers outside the UK and Europe with access to our platform, either on premise or in the cloud. We aim to achieve this by growing our partner network and developing territory specific offerings around the core product set.

For operational users, we have a new release of our Operational Modelling Centre due out in the autumn. This will help ensure more efficient and controlled modelling and reduce the demand for qualified actuaries to be heavily involved in day-to-day model runs and management.

In addition, we are planning some significant upgrades to other products, such as our Cloud Modelling Service. This will include the development of new cloud microservices available through the online cloud marketplace.

Finally, we will be updating our Excel Model Adaptor, which facilitates the migration of unmanaged spreadsheet-based models into fully managed Mo.net solutions.

How do you view the wave of insurtechs startups offering solutions in the re/insurance market?

As a self-confessed technology nerd, I’m actively involved in many of the discussions and developments around insurtech, and indeed actuartech. Some of the emerging technology really is very exciting, however I’m also wary of solutions looking for a problem.

Life insurance especially has a huge amount of technology debt, which needs to be addressed before some of these new ideas will have any chance of success.

Let’s not miss the opportunities afforded by some of this new thinking by attempting to force it into a legacy environment which simply won’t support it.

Guy Shepherd

T: +44 (0) 7585 952 683

E: [email protected]