October 1 - 3, 2000, The Westin Providence, Providence, R.I.

Seeding Tomorrow's Virtual Cedent Jim Low, Director of startup ventures, Swiss Re America

Reinsurers Can Realize Web Efficiencies
Caroline Saucer, Caroline.Saucer@ambest.com

As Swiss Re America injects $70 million into its Web-enablement technology, it looks toward increasing administrative efficiency and getting the opportunity to add value to its businesses, said Jim Low, director of start-up ventures at Swiss Re America.

Low spoke at "E-Fusion: Where Insurance and Technology Converge," a conference sponsored by A.M. Best Co. held Oct. 1-3 in Providence, R.I. Full coverage of the event is available online at http://www.ambest.com/e-fusion.html.

Web efficiencies can add value for reinsurers in many ways, he said. That includes:

• Operational integration, where new efficiencies permit more attention to the market;

• Online account data transfer, which allows system-to-system efficiencies;

• Opening up datamines, with better risk assessment;

• Supporting continuous innovation;

• Financial integration; and

• Online marketing of reinsurance capacity and support of new business models.

The company is embarking on initiatives such as e-extend, which will focus on products and services, content management and delivery, information and knowledge sharing; e-new business, which will focus on new products; creation of revenue and earnings opportunities; adding strategic value to Swiss Re's future; and e-attack, which is expected to create long-term value through capital gains.

Swiss Re's portal is improving in stages, he said, noting that eventually it will be like an online team room with clients. Some sites are neutral exchanges to be used by several reinsurers, while others cater to their own business.

Where Swiss Re America goes will depend on the market, Low said. "If exchanges develop to the point where the industry believes that's the point to be, we'll be there. Success is inevitable. I do believe Web-enabled processes will change how business is done in insurance," he said.

Swiss Re Group is no stranger to technology, Low noted. In May, Swiss Re Group introduced its ELRiX platform for the sale of weather derivatives.

The online service reaches smaller companies that didn't have access to this type of product---especially oil-heat distributors. The derivatives are put-and-call options aimed mainly at power utilities, gas-distribution companies, heating-oil distributors and other companies that need to protect their sales against fluctuating temperatures (BestWire, May 31, 2000).