Insurance technology with new risk managment tool for industry use
U.S. RE Analytics, a consulting firm that provides services to the insurance and reinsurance industries, has developed a new tool that could help some insurance companies manage the cost of reinsurance more efficiently. The tool, called U.S. RE Risk Optimizer, is designed specifically to assist companies that are exposed to catastrophic natural disasters. These disasters have proven to be a serious financial risk over the past two years. Two consecutive years of severe natural catastrophes have caused the price of reinsurance to jump significantly, which has put more financial pressure on insurers and, by extension, consumers.
The tool will help insurers analyze the risk factor of the policies they offer.
Each policy contributes to an insurer’s overall liability to risk, which affects the cost of reinsurance. Using the tool, insurers will be able to refine their liability, which could have positive implications for the profits of the company as it begins to pay less for reinsurance coverage. U.S. RE believes that the tool will become a staple for the insurance industry, especially as natural disasters become more of a serious issue.
The last two years have had a major impact on the insurance industry in the U.S.
These years were host to a high frequency of natural disasters that proved to be difficult for insurance companies to manage. These disasters spurred more expensive reinsurance coverage as reinsurers attempted to mitigate their own losses from consecutive catastrophic years. Currently, the reinsurance industry enjoys a degree of financial power, which grants companies the ability to price policies as they see fit instead of having to cater to insurance companies as a way to stay competitive in a given market.
The U.S. RE Risk Optimizer can be used alongside the U.S. RE Risk Manager, an online tool that helps insurance companies manage profitability by analyzing factors that are contributing to the cost of reinsurance coverage. U.S. RE believes that the two tools work well together and will give companies better command over their financial situations. This could translate into financial resiliency if companies can use the tools to prepare for a year that is showing signs of being as prone to disasters as its predecessors.
Article: U.S. RE Analytics releases new tool to help insurers manage their risk exposure
Article Source: Live Insurance News
Author: Shawn Nordstrom