Disruption and Reinsurance – An Overview and Perspective
Journal of Reinsurance, Vol. 25, No. 1, pp. 23-26, 2018
Posted: 26 Apr 2018 Last revised: 4 May 2018
Date Written: April 10, 2018
Reinsurance is often thought of as a mature, rather staid, industry. However, it has nevertheless been the subject of innovation over the past couple of decades, albeit from a purely financial perspective (e.g., catastrophe bonds, sidecars, “hedge fund re” start-ups, etc.). For a variety of reasons—some of which we will discuss—the reinsurance industry may soon be transitioning to a new phase of competition, one that is characterized by a variety of innovative strategic, operational and/or technological initiatives (i.e., beyond merely financial ones). To help put the competitive environment into context, we profile similar considerations that have led direct insurers (or cedants) to make significant investments over the recent past. We next profile several currently innovative initiatives in the reinsurance marketplace, which seemingly have the potential to disrupt the business of global reinsurance (assumed and ceded). Finally, we conclude with suggestions that reinsurers can practically consider, such as the selection of an appropriate Enterprise Innovation Model, when they are confronting innovation either offensively or defensively as part of their strategic planning processes.
Keywords: Reinsurance, Disruption, Corporate Strategy
JEL Classification: G22, L10
Suggested Citation: Suggested Citation