Strategy

The global non-life insurance industry which has annual premium income in the trillions of dollars is split into personal, commercial and corporate risks. Corporate insurance, which is business-to-business, breaks down into natural perils (windstorm, earthquakes, tsunami) and man-made perils (accidents, collisions, market changing events), the latter is (re-) insured by the international specialty market, most notably by Lloyd’s syndicates.

Specialty risks are complex, have high exposure levels which are subject to volatile loss experience and emanate from the operations of major institutions. Such risks are brokered and tend not to be underwritten by one insurer, but are underwritten on a co-insurance basis and then reinsured through various secondary risk transfers to the reinsurance and retrocession markets. To manage such exposures requires a depth of knowledge of underlying risk structure that only a sophisticated risk model can provide.

Underwriters who deal with such risks on a daily basis tend to manage them piecemeal using spreadsheets that:

• require intensive manual effort
• do not have adequate data validation and are prone to human error
• are not integrated with established business processes
• are not embedded within the IT infrastructure
• do not meet the standards required under Solvency II.

Our strategy promotes a software-based model which facilitates the integrated management of these risks, so that underwriters have better knowledge of underlying exposures prior to capital commitment, and have improved risk controls for timely, accurate and auditable decision making at all times. Russell also enables support for a broad range of financial instruments, so that portfolios which are diversified across insurance and capital markets can have effective exposure management control, despite boundaries in the financial markets becoming increasingly blurred.