Dr. Marcus Winter (pictured), president and CEO of Munich Re North America Property and Casualty and Reinsurance, recently shared his insights on trends impacting the reinsurance industry – and its challenges.
“The industry has become very numbers-driven,” Winter noted in an AM Best interview. “Twenty-five years ago, we focused more on the legal aspects and contracts’ wording. Now, it’s mainly around numbers, data, and insights. Companies have become larger and more specialized. Overall, the marketplace seems to have become more competitive.”
He highlighted Munich Re utilizing their data and insights to offer clients stability and longevity, two factors he described to be highly sought after in the industry.
“This has fueled our growth [globally] over the last five to 10 years,” said Winter.
Discussing the role of technology, Winter highlighted the impact of artificial intelligence.
“For us, it’s more about the risk insight, quality of underwriting, and decision-making,” he said. “We’ve invested heavily in data insights, accessing structured and unstructured data. Large language models like ChatGPT are game-changers, helping us do more and gather information about the portfolios we underwrite.”
Winter also addressed the biggest challenges facing reinsurers.
“The two biggest challenges are legal system abuse and climate change,” he said. “The legal system in the US often produces outsized verdicts, which is not sustainable. Some states have started allowing the discovery of litigation funding involvement in legal processes, but we need [broader transparency].”
Climate change remains a critical issue. “We [see] severe convective storms impacting large parts of the country and floods and wildfires,” Winter noted. “For us, that is an opportunity to work on finding solutions for these exposures, both on the risk assessment side and through data analytics tools. Managing these key topics will [ultimately benefit everyone].”
Looking ahead, Winter expressed confidence in the reinsurance market’s trajectory.
“The world is getting more risky, and everyone wants to have stability and reliability,” Winter said. “Our core value proposition is a long-term, stable, reliable business model. Our clients appreciate that we will be there after the next event, bringing expertise and insights,” Winter said, noting this will continue to drive the industry’s development.
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