Rethinking Credit Insurance: A New Perspective
During a recent Insider Engage on Air webinar, panellists discussed how credit risk is constantly evolving. Ben Heaney, CEO and Founder of Dialogue, joined the debate providing insight on how digital transformation can help
Market conditions, litigation and even climate change all influence credit insurance; but one element that is shaping its future across the board is technology – an evolution driven by the COVID-19 pandemic.
As moderator Raphael Zindi, Product Manager at S&P Global Market Intelligence pointed out during the recent webinar – Rethinking Credit Insurance: A New Perspective – the pandemic has “prompted new perspectives on traditional risk management, bringing into focus how digital can help efficiently monitor and act upon risk exposures”.
James Burgess, Head of Commercial at Atradius UK added, “Credit insurance has evolved – it is no longer there just to pay claims; it enhances capital, access to funding and helps enhance credit management teams. In order to service all opportunities economically, we need to look at automated underwriting and pricing – but we need to be careful with the volume of risks. Being able to drive service back to a marketplace is where the value is.
”Transacting complex commercial risks, however, is not a simple process, as Taos Fudji, Director, Senior Insurance Analyst at S&P Global Ratings, explained, “One of the difficulties that trade credit insurers face is that they are regulated entities. They have to be cautious when they start extending new products. Services need to be profitable, cost effective and not deteriorate their risk profile.”
“The evolution of products and markets react to different types of risk,” Phil Amlot, Senior Underwriter, Head of Portfolio Global Trade Credit at Markel International added. “On the distribution side, we are seeing more platforms coming up, while from an information side we are seeing information providers provide more data.”
A digital evolution
This focus on data and distribution is where tech comes into play, as Ben Heaney, CEO and Founder of Dialogue, explained.
“Tech can bring a lot of value if it is class specific. Single transactions generate opportunities; but if you can’t triage and underwrite huge volumes you miss out on revenue opportunities.
Distribution currently varies by 70% between syndicates, but with the right technology in place, you can allow more traffic through in a controlled manner. By enabling underwriters to set algorithms to conduct high-level triage results in greater efficiency and increased revenue. The end goal is better data clarity.
Digital transformation is a big thing and perfect is unattainable; it is always changing. The focus should be on getting better, " Heaney concluded.
Listen to the webinar in full.