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2017 was a year of challenges for Gen Re, both external and internal. The external challenges do not need much of an explanation, as the natural catastrophes of 2017 hit Gen Re’s underwriting results much like they hit the industry – harshly. In line with most of our competitors in the risk business, we ended 2017 with a combined ratio well north of 100%, landing at 114.6% on $6.4 billion of net earned premium. That earns 2017 the uncomfortable distinction of being one of the worst underwriting performances in Gen Re history. As humbling as that is, one of the consolations of having a balance sheet strong enough to withstand the harshest of hits is that when we experience a year like 2017, we can refer to it as a disappointing part of our history, because it does nothing to threaten our future or the path we are forging ahead.
Despite the disappointing results for 2017, I am enthusiastic about how the internal ambitions that we set for ourselves will favorably impact Gen Re well into the future. Gen Re has always been a strong partner to its clients, financially and otherwise, and we are actively focusing on expanding the ways in which our financial strength can be put to work for our clients. We are encouraging our associates to have the confidence and perseverance to explore how best to meet each client’s needs in ways both obvious and creative, and relentlessly applying the re-energized efficiency and creativity of our team to assisting our clients in tackling their challenges.
I could not be more proud of the focus and diligence that Gen Re associates brought to these tasks. It is not easy to maintain your enthusiasm and energy when your efforts are not reflected in the company’s current results. Nonetheless, we grew written premium last year in almost every business unit. I hope and trust that you, our clients, are also seeing evidence of the entrepreneurial spirit that we have encouraged our associates to embrace. In fact, we are eager to hear from you about how we are doing, and what we can do better. We value and appreciate the privilege of our direct relationships, which allow us to really listen and engage with you through unfiltered and unvarnished conversations.
With 2017 behind us, and as we proceed through 2018, we are a leaner and more focused business partner for our clients. We have a special advantage in our pursuit of our business goals: Gen Re does not have capital constraints or the impositions of an unrealistic owner as excuses for failing to meet its clients’ needs. I think this is best demonstrated by another look at those external challenges the industry faced in 2017. It is easy for the reinsurance industry to congratulate itself on a job well done after the losses have been paid, but I know what we were thinking as Irma was headed towards Miami, “How do we get checks to our customers quickly?” and “How can we help our customers move forward from such a tail event?”
When you have a meaningful and direct business partnership with your reinsured, these are the only things to think about when the losses are coming, and if we can have that kind of service-oriented mindset establish the tone for our work, then both Gen Re and its clients have a great and long future in front of them – whatever the challenges that will surely come.
Kind regards and best wishes for 2018,
Disruption, big data and innovation are recurring themes for insurance companies trying to keep ahead of the competition today.
Carriers are under pressure to respond to stakeholders who are demanding improved customer experience and streamlined operational processes. At the same time, the need to offer more competitive pricing hasn’t gone away, despite an improving market.
It’s not surprising that, in such a demanding environment, insurers are looking to data analytics to differentiate themselves.
However, small- to medium-sized insurers risk being left behind by larger companies. They are not well situated to reap the benefits of data analytics because they may not have the necessary resources and breadth of data.
Recognizing the potential disadvantages facing such insurers, Gen Re has embarked on a journey to initiate collaborative opportunities with and among Property & Casualty carriers in North America. Our philosophy is based on the principle of collaborative intelligence.
“None of us is as smart as all of us.”
Ken Blanchard
Our appeal to the insurance community is that there is a delicate balance between communicating/collaborating and competing. To that end, we are in the process of applying our data and expertise to develop group level industry insights based on diverse experience that can enhance our partners’ knowledge.
Within Gen Re, we have carefully adopted an extremist business objective-driven position when it comes to analytics. We will avail our partners of that advantage by sharing our experiences in internalizing such an approach. In addition we assume the role of a trusted advisor to our clients and offer our observations as a broader foundation for managing their analytics journey.
The bottom line is that today’s P&C business environment is complex and constantly changing. To stay competitive and thrive, all P&C carriers need to leverage insurance industry trends to strengthen, or even question, their accepted business hypotheses.
To learn more about how Gen Re’s data and analytics collaboration initiatives can work for you, don’t hesitate to reach out to your Gen Re underwriter or account executive. We think you will be surprised at what’s possible.
Our Stories
Mobile technology is revolutionizing the financial services sector in ways that are radically changing consumer expectations. Today’s life insurance buyers increasingly want simple, secure, self-service options. Insurers that can deliver such a choice will have a clear competitive advantage.
That’s why Gen Re is working to help our clients improve their customers’ experience by simplifying the life insurance buying process and allowing immediate policy commencement. We’ve developed a proprietary, dynamic online questionnaire that reduces the number of questions required to obtain life insurance coverage, without compromising underwriting integrity.
Because not all carriers are the same, we offer our clients the flexibility of implementing the solution in a variety of ways. This ranges from an online form to a mobile app, with or without an additional underwriting step that paves the way for collecting continuous lifestyle information – all depending on what makes sense for a client’s markets, products and processes.
Carriers can use this solution to:
Using this process, our clients can quickly respond to applications in a more engaging way, and collect, track and analyze data to ensure a better experience for their insureds.
Growing evidence indicates that maintaining regular communication with policyholders leads to better client retention. It’s particularly important in Life and Disability insurance where claims frequency is traditionally low. Flexible premiums based on continuous lifestyle measures – such as the daily number of steps – can help reposition insurers as life enablers.
This offering is currently available for our Life clients outside North America. To discover how we can put this technology to work for your international business, please contact us for more information or a demo.
Our Stories
Labor intensive, data centric and yet paper based, the insurance industry should be eager to adopt new technology that reduces frictional costs and simultaneously keeps up with changing consumer behavior.
Yet reimagining the back office to reduce complexity and modernize its underlying technology is widely perceived to be a long, difficult and expensive process. It’s perhaps why many insurers have yet to take even the first steps and adopt tools that could transform their businesses.
Robotic Process Automation (RPA) offers just such an opportunity.
In 2017 Gen Re started out on an RPA journey with the objective of tackling process inefficiencies and reducing the time and cost of administering our business.
We focused on the repetitive rule-based functions that require diligence and accuracy but not judgment, such as entering cash to the ledger from overnight bank runs and uploading detailed schedules of properties on Facultative Program business. Many others, spanning the full range of our underwriting, claims and accounting support functions, are in development.
Our experience has already shown that a modest upfront investment in an RPA solution can be quickly paid back. Our first software robot (bot) went live within a few months and new bots were deployed in the following weeks.
Our support costs have already started shrinking as we have been able to automate work that was previously outsourced to low-cost locations.
While a certain amount of hype has surrounded some forms of RPA, its potential to make a difference in the insurance world is real. Importantly, it’s already demonstrated that innovation doesn’t have to be overwhelming or expensive.
Can RPA help increase your process efficiency, reduce costs and improve customer experience? It’s worth a look.
Our Stories
29,758
TOTAL INVESTMENTS
40,924
TOTAL ASSETS
22,319
UNDERWRITING RESERVES
14,359
SHAREHOLDERS’ EQUITY
6,664
NET PREMIUMS WRITTEN**
114 %
COMBINED RATIO**
* Unaudited, amounts in millions of U.S. dollars
** Amounts per Berkshire Hathaway Annual Report, which excludes the impact of the intercompany loss portfolio and quota share retrocessional agreements.