Reinsurers and primary carriers flush with cash after a few good years of strong earnings could be spending their money more wisely by beefing up their training programs and technology infrastructure, advised one industry observer here.
“With the profitable years the industry has had, it's a great opportunity to invest in technology and training, and best practices that would sustain earnings over the long term,” according to David M. Siesko, a principal with Siesko Partners–a New York-based firm that helps resolve conflicts between policyholders and their carriers.
“It's disappointing,” he said, “especially in the technology and training areas. Global customers expect insurance carriers to be global, not regional. Lack of technology is a competitive disadvantage for both primary insurers and reinsurers.”
An emphasis on training is also a necessity because “the results begin at the underwriting and claims-desk levels,” he said. “High-minded strategies can leave that fact out.”
Many insurers and reinsurers are now returning extra cash to shareholders or making acquisitions, according to Mr. Siesko. He said reinsurers eager to acquire other companies need to pay less attention to the balance sheet and look harder at what they're actually getting–especially in areas such as claims.
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