In the Reinsurance industry, where catastrophe modeling and risk assessment are paramount, data is (truly) the lifeblood of operations.
But what happens when a rapidly growing firm finds itself drowning in disparate data sources and manual processes?
This case study explores how we at Bespoke Analytics, a Business Intelligence and Data Consulting consulting firm based in Hamilton, Bermuda, helped a local reinsurance company overcome its data challenges and build a robust, scalable data management solution.
The Client: A Fast-Growing Reinsurance Firm
Our client, a Bermuda-based reinsurance company, had been in operation for about two years.
Despite its youth, the firm was experiencing rapid growth, both in terms of gross written premiums and staff.
From the outset, the company had made a strategic decision to be entirely cloud-based, avoiding on-premise infrastructure to stay agile and forward-thinking.
The Challenge: Data Disarray in a High-Stakes Industry
As the company expanded, it faced several critical data-related issues that threatened its ability to price risks accurately and meet regulatory requirements:
Disparate Systems: Different departments (underwriting, actuarial, finance, claims) had chosen separate software solutions, often SaaS-based, creating a fragmented data environment. As Paul, (our founder and President) noted, "They quickly looked to bring in different types of solutions for their different user groups. So the actuarial team picked a solution. The finance team picked a solution. The underwriting team picked a solution."
Manual Data Handling: Highly skilled professionals were spending excessive time downloading, combining, and cleansing data manually. This was particularly problematic for actuaries working on complex catastrophe models and underwriters assessing intricate reinsurance contracts.
Inconsistent Reporting: Different teams often produced conflicting numbers for key metrics like Incurred But Not Reported (IBNR) reserves or Expected Loss Ratios due to data staleness or varying calculation methods.
Limited Data Access: Some data sources were technically complex to connect to, limiting access for non-technical users. As Paul explained, "If they didn't happen to be technically adept to be able to connect to a REST API, say, and download some information and then put it somewhere else, they just basically wouldn't have access to that data."
Compliance Concerns: The disconnected data environment raised worries about meeting strict regulatory and audit requirements, such as those set by the Bermuda Monetary Authority (BMA).
The Solution: A Unified Data Estate for Comprehensive Risk Assessment
Bespoke Analytics proposed and implemented a comprehensive solution designed to handle the complexities of reinsurance data. A Unified Data Estate for Comprehensive Risk Assessment:
Cloud-Based Data Platform: Leveraging the client's existing Azure tenant, Bespoke set up a centralized data lake and data warehouse, capable of handling large volumes of underlying policy data crucial for accurate risk assessment.
Automation Tool: TimeXtender was employed to automate data ingestion from multiple sources and deploy to various database technologies. This was particularly critical for integrating complex actuarial models and underwriting data.
Phased Implementation: Starting with the underwriting system, Bespoke gradually integrated data from other departments, aligning with business priorities. As Paul described, "Everything really starts with the underwriting journey... So we'd start with the underwriting source systems first and bring those in."
Hybrid Approach: To address immediate reporting needs, raw data was initially ingested into the data lake for quick access, while a more refined, curated model was developed in parallel. This allowed for rapid improvement in areas like regulatory reporting while building towards a more comprehensive solution.
Continuous Value Delivery: The team focused on providing value to end-users as quickly as possible, rather than waiting for the entire system to be complete.
The Implementation Process: Agile and Responsive
Platform Setup: The initial infrastructure was set up in just a couple of weeks, demonstrating the efficiency of cloud-based solutions.
Proof of Concept: A five-day POC demonstrated the solution's capabilities, impressing stakeholders with its speed and efficiency. Paul recounted, "They were quite amazed at that. And if you use the right tools, it can be quite quick."
Phased Data Integration: Within three months, the underwriting data was fully ingested, followed by actuarial information. This quick turnaround allowed for immediate improvements in risk pricing accuracy.
Flexibility: The team adapted to changes, such as pausing finance system integration when the client decided to overhaul their finance system mid-project. This agility is crucial in the fast-paced reinsurance industry.
The Results: Transformative Impact on Risk Assessment and Compliance
The new data management solution delivered significant benefits:
Time Savings: The company now saves person-weeks of effort each month on data assembly and preparation. As Paul estimated, "Across the organization, they must be saving, you know, person weeks every month on the data assembly."
Enhanced Compliance: The centralized, well-documented data estate addresses audit and regulatory concerns. Paul noted, "From a governance and compliance perspective, it was just tick, tick, tick, tick. So they got that. They don't have to worry about these anymore. Audit's going to be great, easy and automated."
Expanded Data Access: Users now have access to previously hard-to-reach data, enabling deeper insights. This is particularly valuable for actuaries analyzing large volumes of underlying policy data.
Improved Decision Making: With more time and better data, professionals can focus on high-value tasks like actuarial pricing, reserving, and strategic underwriting decisions.
Scalability: The solution continues to support the company's rapid growth, integrating new systems and data sources as needed. Paul: "The company now is more than twice as big as it was when we started."
Lessons Learned and Best Practices
Change Management is Crucial: Initial pushback from some users was overcome through education and demonstrating the system's benefits. As Paul advised, "We didn't get upset. That's what takes place. And over time, we just kept engaging them in the process."
Industry Knowledge Matters: Bespoke's understanding of reinsurance data needs helped streamline the implementation process. For example, knowing to prioritize underwriting data as the foundation for other analyses.
Flexible Tools are Key: The ability to connect to various data sources, including complex SaaS APIs, was essential for success in the diverse reinsurance technology landscape.
Continuous Partnership: Ongoing collaboration between Bespoke and the client ensures the solution evolves with the company's needs, particularly as they explore advanced analytics capabilities.
Actionable Advice for Reinsurance Companies
Audit Your Current Data Processes: Identify manual data handling tasks and inconsistent reporting across departments. Quantify the time spent on these activities to build a case for change.
Prioritize Data Sources: Start with core systems like underwriting, as these often form the foundation for other analyses. This allows for quick wins and sets the stage for more complex integrations.
Invest in Automation: Tools like TimeXtender can significantly reduce manual data handling and improve consistency. This is particularly valuable for complex reinsurance calculations and regulatory reporting.
Consider a Hybrid Approach: Balance immediate reporting needs with long-term data architecture goals. This can help secure buy-in by delivering quick value while building towards a comprehensive solution.
Engage a Knowledgeable Partner: Look for consultants with specific reinsurance industry experience. As Paul suggests, "We're here in Bermuda. We're available. We're knowledgeable and skilled resources that can help them."
Conclusion
This case study demonstrates how a well-planned, flexible data management solution can transform operations for a growing reinsurance firm. By partnering with Bespoke Analytics, the company not only solved its immediate data challenges but also laid the foundation for data-driven growth and innovation in the future.
For reinsurance companies facing similar data struggles, the message is clear: expert help is available. With the right partner and tools, it's possible to turn data from a burden into a powerful asset for business growth, risk assessment, and regulatory compliance.
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At Bespoke Analytics, we combine deep industry knowledge with state-of-the-art technology to help reinsurers transform their data into a powerful strategic asset. Our tailored solutions address the unique challenges of the Bermuda market and beyond, enabling our clients to not just stay ahead, but to redefine industry standards in an increasingly data-centric world.
Are you ready to unleash the full potential of your data and gain a competitive edge?
Contact Bespoke Analytics today for a complimentary consultation. Discover how our proven expertise can help you leverage data integration to transform your reinsurance business and drive unprecedented growth and efficiency.