
1 minute read
Credit Insurance Committee
Thomas Meyer
Thomas Meyer Chair of Credit Insurance Committee
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At the CIC meeting in Brussels, it turned out that on a day-to-day basis, one of the most prominent issues remains the overall geopolitical situation; its developments and implications on the economy; and hence, on credit insurance markets. In this respect, tensions between the West and China, especially regarding the status and outlook of Taiwan, appeared to be at least as important to delegates as the Russian war in Ukraine. More into the details, the rise of inflation and interest rates, expected insolvency developments, and the dealing with sanctions were discussed.
Another area of interest that had not been on the agenda originally is the field of automation, digitization, artificial intelligence and machine learning. This turned out to be important for quite a number of delegates in the longer-run aside from daily business concerns.. Obviously the topic is not new, yet in recent years it was overshadowed by immediate major issues like the Covid19 pandemic and the quickly changing geopolitical scenery. After this lull, it now appears to be to the fore again. The further evolution of new technologies is perceived to be a potential game changer in trade credit insurance, if not a real threat to existing traditional business models over time.
A number of major global long-term developments, also referred to as “megatrends”, the definition and features of which may vary slightly depending on the source, are expected to impact on society and economy and would require some new solutions. Automation and digitization itself is one of those trends, others include the focus on sustainability and the approach to climate change, the rise of China as a global power, or the transformation away from physical goods towards the provision of services (e.g. music and video streaming that has largely replaced CDs, DVDs, etc.).
Credit insurers are faced with the challenge to further automate and digitize their internal processes, e.g. by the introduction of machine learning features to their underwriting setup, in order not only to maintain and improve on efficiency, yet also to keep up with competitors that might come in from a completely different angle, like e.g. tech companies other financial institutions. A rather granular request explicitly mentioned in the CIC in this context addresses the desire for the consistency of data between primary insurers and reinsurers, respectively the ease of data transfer between contractual parties on a large scale. This is something the market has been working on for years yet there still seems quite some way to go. It exemplifies that a lot of work appears to be ahead of credit insurers when it comes to automation and digitization. It also shows that the issue has not been completely overtaken by current affairs, and that credit insurers remain aware of the challenge.