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The relentless evolution of insurtech will ultimately mean job losses and potentially a decline in the requirement for reinsurance globally, Clive O’Connell, partner and head of insurance and reinsurance at law firm McCarthy Denning, told Monte Carlo Today.
He said it will make reinsurers more efficient and revolutionise the reinsurance landscape in the process.
“Insurtech will affect reinsurance as much as insurance as people look to efficiencies to reduce the expense ratio. This will mean fewer people employed in the sector,” O’Connell said.
“Insurtech will also give more scope to ILS to compete with reinsurance. If massively capitalised companies like Google, Amazon and eBay become involved in insurance, the need for reinsurance may decline. Those companies would only need catastrophe protection, which they could obtain from ILS.
“It has to happen. Efficiencies are required. The next five to 10 years will bring massive changes.”
He added that the only option for reinsurers is to try and stay ahead of the curve and embrace and utilise insurtech to create cost efficiencies.
“Insurtech will change the way insurance and reinsurance operate. It is here to stay,” he concluded.