Enhancing investor confidence through structured digital submissions

At CatX, we have seen first-hand how effective structured digital submissions can be in securing better priced capacity from institutional investors. We are strong advocates for structured submissions as they help enhance transparency, support decision-making and attract a broader investor base.

This is why we have developed Catamaran, our powerful new tool for cedents and brokers to create high-quality structured submissions. It ensures that the transaction information presented to capital providers on reinsurance and retrocession opportunities contains the necessary data to make an informed investment decision.

Digital submissions help insurers and brokers to secure capacity at improved rates in a reduced time-frame, while also diversifying their reinsurance panels. Additionally, these submissions are more machine-readable, ensuring opportunities are matched with market demand.

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Supporting Investor Decision-Making and Enhancing Confidence

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Structured submissions offer a clear and detailed presentation of risk data, which is essential for underwriting, modeling and pricing. High-quality, standardized data helps both institutional investors and existing markets to analyze the underlying risks more accurately. This transparency helps to boost investor interest and confidence, securing more favorable pricing.

Structured submissions organize key transaction and risk data in a way that is easier to analyze. This reduces the time investors spend on understanding and evaluating risks, helping to accelerate the investment process and expedite investment decision making. It also expands the range of structures that investors are comfortable investing in to encompass proportional opportunities like Quota Shares as well as indemnity-based payouts. Typically, these kinds of structures have been less appealing to new investors compared to parametric or index-based opportunities which can be easier to assess and model.  

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Attracting a Broader Range of Investors

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Structured submissions make the insurance risk more comprehensible and appealing to a broader range of investors, including those not traditionally involved in insurance. By demystifying insurance risks and presenting them in an investor-friendly format, CatX helps brokers and insurers to diversify their capacity panels with access to new funds. Receiving data in a clear format allows us to run a greater range of risk models, and provide more detailed insights on underlying risk and portfolio information.

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Improving Operations and Simplifying Access to Alternative Capital

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The Lloyd’s market is encouraging the adoption of standardized submissions as part of its Blueprint 2 roadmap. This initiative is designed to streamline operations and enhance the efficiency of the entire market. By standardizing how submissions are prepared and processed, Lloyd’s aims to reduce cost ratios and improve the speed and accuracy of risk evaluation. Catamaran is designed to be fully compatible with these market standards (including the new MRCV-3 and CDR standards) as well as other insurance standards. This makes it easier than ever to go to both the private collateralized reinsurance market and existing traditional reinsurance markets.

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Advancing Algorithmic and Automated Underwriting

Structured submissions are designed to be highly machine-readable, setting the stage for algorithmic underwriting. By making submissions more compatible with machine learning algorithms, we enable a more streamlined and precise underwriting process.

On CatX we already allow investors to set rules around rates on line and expected loss. These structured submissions help ensure opportunities are more accurately matched to the markets that want them. By providing detailed and standardized data, we facilitate the creation of automated underwriting rules that align with investor preferences. This not only speeds up the underwriting process but also increases the likelihood of securing optimal pricing and capacity from targeted markets.

Algorithmic underwriting represents a significant leap forward in the insurance industry, and our tools, such as Catamaran, are designed to support this evolution. By enhancing the machine readability of submissions, we are paving the way for more sophisticated and responsive risk management solutions that benefit both insurers and investors.

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Summary

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Standardizing submissions is crucial for the growth of the insurance-linked securities sector. With Catamaran, our aim is to streamline the creation of structured submission files. We have seen first-hand that structured submissions lead to significant increases in the number of responses from new funds and help cedents to secure better priced capacity.

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Contact us if you would like to learn more about how we can bring connect you with better priced capacity.

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