Is there any surprise or drama when you sit on the board of directors of insurance and reinsurance captive companies?
Or is it boring?
People would tend to answer with a big NO to the first question and a big YES to the second one.
And you would be wrong!
Contrary to big insurers or reinsurers, captives are an integral part of risk management and risk financing in large corporations. They are constantly challenged by a fast-changing risk landscape and must quickly adapt to movements in mergers and acquisitions, the creation of new production sites, and geopolitical factors that upset established providers’ networks.
Can AI play a role in captives? This is one of the questions that we ask as board members and a topic that is discussed at risk managers and captive managers meetings. Some people feel that the captives’ databanks are not sufficiently large to provide meaningful information. Others have immediately found solutions that not only serve the captives but also their corporate owners.
In a former podcast, we already spoke of Pho who, with a professional team, developed a program that translates insurance policies from 90 countries and compares the conditions against a model.
The other day, it was the turn of two young ladies to surprise me. Ines has for some years been a property underwriter and knows the job inside out. Ana hast studied finance and insurance at university and joined the insurance team recently with “new eyes” and the ability to talk to IT wizards in their language.
What have they done that really impressed me?
Many years ago, as part of my training, I accompanied surveyors on their visits to industrial sites. I still vividly remember going through hell when inspecting cotton gins in Western Nicaragua where the temperature was 40°Celsius (104 Fahrenheit). Back in the hotel and between two beers we must write long reports with pictures and drawings showing all the improvements to be made.
Today’s surveyors work more professionally, and their reports are well-structured. Still, it is time-consuming, even for a specialist like Ines, to read and distill the essential messages from documents with an average of 50 pages each. And, when you receive over 70 reports a year, you must read them, list the actions to be carried out, transmit them, and check whether the recommendations are implemented.
To make a long story short, Ines and Ana “ganged up” with a team of brilliant IT specialists. They presented me with their AI-based solution, which impressed me. But there is more! Their boss was so proud of this achievement that he gave them the opportunity to give a demonstration at a meeting of top executives from the insurance industry.
There would be buyers… but the company does not sell software. It will thus be an excellent internal tool and an inspiration for other companies to develop similar solutions.
Paul.
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