Rising demand for climate risk software to help insurers address climate change is the key trend to emerge from this year's annual InsuranceERM technology guide.
Each year, InsuranceERM’s technology guide provides a comprehensive list of international technology vendors and their software products that insurers use for risk, capital and asset management.
The listing also features noteworthy trends and demands technology vendors are witnessing from their insurance customers.
Insurers’ focus on addressing and managing climate risk stands out this year in more than 100 questionnaire responses submitted by technology vendors worldwide.
One software vendor said: “We see an increasing demand for sophisticated economic and climate scenarios and solutions that can translate these scenarios into optimal balance sheet management decisions.”
Another provider noted the demand for risk identification and measurement relating to climate risk in economic and regulatory capital.
One provider told InsuranceERM that chief risk officers and the actuarial function are looking to address climate risk in their asset allocations, as the concept is “quite well-developed” on the liability side of the balance sheet.
The vendor said: “Insurers need to understand how different climate change scenarios might affect the financial markets and their holdings over a range of time horizons.”
Having technology to deal with a multitiude of risks and maintain operational resilience in today’s post-Covid-19 world is critical for insurers these days, according to vendors.
One vendor said the low-interest rate environment and an increased focus on risks stemming from Covid-19 are also pushing insurers to rethink their investment strategies.
This trend, plus increased risks from Covid-19, is driving insurers’ demand for sophisticated stochastic modelling software to capture the interdependencies of these risks and provide insights on both an economic and an accounting basis, explained the vendor.
Another observation from this year’s technology is that IFRS 17, the new accounting standard for insurance contracts, is spurring insurers to launch massive finance transformation projects.
Finally, as noted in last year’s technology listing, demand for cloud technology continues to be a major focus for insurers.
This is leading to a trend where capital modelling processing is increasingly taking place using cloud technology, "which offers the opportunity for lower costs, increased flexibility and performance lower risk", one provider commented.
The 2021-2022 technology guide is due to be published on InsuranceERM’s website on 13 September and in the autumn print issue.
A basic entry in the guide is FREE and at the discretion of the editorial team.
We also offer an enhanced listing, which includes a more detailed entry and a corporate statement and advertising package to showcase your offering. Please contact Oli Henry if you would like more information on this option: [email protected] +44 (0) 20 3651 7208.
If you wish to be considered for inclusion in InsuranceERM’s 2021-22 technology guide, please email [email protected]
Cintia Cheong, Ronan McCaughey