By Loretta Worters, Vice President, Media Relations, Triple-I

Insuretech Connect – the world’s largest gathering of insurance leaders and innovators – last week brought together insurance technology stakeholders to network, share insights, and learn about leading-edge technology across all insurance lines.

Conference participants included Pete Miller, president and CEO of The Institutes, who discussed risk mitigation through new technology. 

“Capturing data about the things we do and then allowing us to mitigate risk before we even get to the insurance function, that’s really where I think this industry is going,” he said.

One panel, Climate Risk and Resilience, focused on the importance of Insurtech and innovation to the success and sustainability of the industry. Moderated by Triple-I CEO Sean Kevelighan, the panel included Sean Ringsted, chief digital officer at Chubb; Christie McNeill, associate partner with McKinsey & Company and leader of ESG and Climate Change for the Insurance Practice in North America; Alisa Valderrama, CEO and co-founder of FutureProof Technologies, a venture-backed financial analytics software company specializing in climate risk; and Susan Holliday, Triple-I nonresident scholar and senior advisor to the International Finance Corporation (IFC) and the World Bank, where she focuses on insurance and Insuretech.

“Insurers are no stranger to climate and extreme weather,” Kevelighan said. “They have had a financial stake in it for decades.”

He noted that insured losses caused by natural disasters have grown by nearly 700 percent since the 1980s and four of the five costliest natural disasters in U.S. history have occurred over the past decade.

U.S. insurers paid out $67 billion in 2020 due to natural disasters. The insured losses emerged in part as the result of 13 hurricanes, five of the six largest wildfires in California’s history, and a derecho that caused significant damage in Iowa. 

This year’s Hurricane Ida is expected to cost insurers at least $31 billion and to push Hurricane Andrew out of the top five damaging storms. 2021 has been another record year for wildfires. January 1 to September 19, 2021 there were 45,118 wildfires, compared with 43,556 in the same period in 2020. 

The panelists talked about how insurers have long been aware of climate risk and – to the extent that existing data-gathering and modeling technologies allowed – considered it in risk pricing and reserving. As information storage and processing have vastly improved, the industry has not only gotten better at underwriting and reserving for these risks – it has identified opportunities in areas it once could only view as problems.

Improved modeling, for example, has increased insurers’ comfort with and appetite for writing flood coverage and spurred the development of new products. 

“Insurers are and always will be financial first responders, but there’s a growing realization that risk transfer alone isn’t enough,” Kevelighan said.  “Insurance is one important step toward resilience.  It’s well documented that better-insured communities recover faster from disasters.  But more is required to address increasingly complex global risks.”