Rob Collinson, director, Insurance Consulting and Technology, at Willis Towers Watson (WTW) explains how the company is evolving its products to adapt to technological change
Disruptive change is happening. How are you dealing with this?
We recognise that the insurance industry is on the cusp of disruptive change in many areas which is impacting the way that firms interact with customers, identify new sources of data and use new computing and analytical power. Our newly renamed Insurance Consulting and Technology business is adapting rapidly to support the industry through this potentially game-changing process. We are moving more and of our software solutions to the cloud and creating the ability to deliver many on a purely software as a service (SaaS) basis. We are leveraging technology to refactor many of our core calculation engines to bring a step change in calculation speed and expanding the best bits of our toolsets across a wider range of solutions, such as integrating Igloo with our vGrid platform. This will help to scale compute resources to meet ever increasing calculation needs and allow for provisioning of appropriate hardware on a real-time basis.
What will new releases of your software bring for users?
In November we release Igloo 5.0. This is the most significant release of Igloo for a number of years and includes the first components of our Igloo Next Generation technology. Igloo Next Generation is a complete reengineering of Igloo in the most modern 64-bit technology and enables users to employ all of the computing resources available to them – whether that be all the memory and cores in a single machine, machines in a local network or servers on the cloud. We are fast heading towards the era of real-time financial modelling. Cloud super-computing moves the concept of runtime towards being a user input rather than a period of unavoidable inactivity. The recent release of our vPlace portal allows our software clients to access our solutions on a fully managed SaaS basis.
What kind of progress do you see with Solvency II?
Solvency II is still in its formative years. While businesses have made herculean efforts in the run up to model approval, our experience is that there is a long way to go for this to be considered business-as-usual either by firms or indeed by the regulators. From a capital modelling perspective we have focused on the development and continued refinement of standard libraries and the integration of our tools within our process automation tool, Unify, to help companies integrate and automate the myriad of systems they are using as part of their end-to-end reporting processes.
How are you preparing for IFRS 17?
IFRS 17 is at the very forefront of our minds. While it does not pose questions as mathematically or conceptually challenging as Solvency II, the impact of this standard is likely to be considerably more profound, setting out how each business presents itself to shareholders, regulators and all other interests. WTW are working towards solutions within our general insurance tools, both ResQ – our reserving application – and within Igloo. The flexible nature of the Igloo platform and its support of model governance means it is highly appropriate to implement the detailed modelling of cashflows, reserve uncertainty and reinsurance. We are similarly working on solutions in our life insurance tools such as RiskAgility FM, including the calculation of the contractual service margin.
Our aim is that whichever product is adopted, they will be equally suitable to support businesses as the core calculation tool for the requirements of IFRS 17.
What emergent risks does the industry face and how are you helping?
The industry finds itself facing an array of risks, some of which could be considered variations of old challenges – such as the emergence of a new loss type – through to the potentially existential impacts of global warming and artificial intelligence. We have worked to ensure that key modelling staff are able to focus on delivering value to the business and not just on regulatory demands. Notably, our BrovadaOne product signals an investment in addressing the customer user experience and strengthens our ability to help clients better manage their data and extend the life of their existing IT and legacy architecture. Emerging and as yet unknown risks are notoriously difficult to allow for. In regards to such risks the relationship between the software teams and our consultants becomes key.