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Trust and verify Interview:


ensure it is accurate before you use it. Nobody wants to base underwriting decisions on poor data. Second, you had better be very sure it is accurate before you send it to business partners for their underwriting decisions. There are a lot of ways to share data. You


D


can email uncleansed Excels around, leaving everyone in the same position of not really being confident in the data. You can consider some supposed market-wide ‘cyber bin’, which will compile vast amounts of uncleansed data, which can be accessed by you and your partners. Or you can squarely address the problem by cleansing and validating the data yourself, and provide that structured data with an audit certificate showing every data change to your partners. Which choice would the underwriters who


provide your E&O policy want you to select? Our


clients address the data problem directly by obtaining accurate underwriting


ealing with data can come with two perils. First, once you receive it you had better


Frank Fortunato, CATEX


Frank Fortunato, CEO, CATEX, talks about the implicit need for accuracy when handling data.


information and placing themselves as the control point in the flow of validated data to deal participants. Controlling the distribution of accurate data can mean controlling the deal. The


CATEX Data Vera/Binder


Management System lets you upload data of any format and size automatically without labour- intensive ‘mapping’ to templates. This not only means that anomalies and errors are identified but it results in an ‘audit certificate’ you can send to partners showing every data change that was made as well as the original value. Isn’t this better than hoping that another


party on your deal will show the initiative to look at data residing in a data warehouse? The


CATEX Management Data System matches premiums,


claims and settlements to the most granular risk level. Detailed ‘big data’ is useless unless a system can manage it. CATEX’s system is designed to do just that.


Vera/Binder We think there’s a reason we’ve been named


Intelligent Insurer’s Best Technology Provider of the Year for the last three years in a row. n Frank Fortunato is CEO at CATEX. He can be contacted at: ffortunato@catex.com


is growing quickly, allowing counterparties not previously active in the ILS space to use this method of risk transfer, John Butler, managing partner at Twelve Capital, told Monte Carlo Today. Deals of this nature can be structured in as little


as 10 days and also allow investors access to more diverse risks unavailable in the public markets. “The ILS markets continue to open up


to private cat bonds, and that’s an area where Twelve Capital have been particularly active, with the firm investing in three such bonds in the second quarter of this year alone,” Butler said. “From our perspective, we’ve found that


more traditional counterparties who wouldn’t have previously been active in the ILS space have become interested in transacting in private cat bonds and, because we have a cost-effective platform, bonds can be effectively structured on behalf of our end investors. “It takes about 10 days to put one of these together and the benefit of this is that we can


Growth in private cat bonds brings new faces to ILS D


riven by lower costs and faster time-scales, the market for private catastrophe bonds


introduce investors to more diverse risk through new counterparties who wouldn’t ordinarily have had the chance to issue cat bonds on the public markets.” He said the rise of these bespoke deals has


in part been driven by a growing sophistication among investors and due diligence processes that have continued to become ever more detailed over the past 12 months. “Pension funds are well-educated as to the


nature of these risks, having historically always been the major providers of equity investment for traditional reinsurers,” Butler said. “Today, they just become more proximate to the same risk as their level of sophistication improves. “Coupled with the significantly improved of


levels detail and by their granularity manager around


reporting, investors are being regularly educated


around how


investments are performing and frequently seek ever more innovative solutions in order to enhance returns.” The growth of the sector will be boosted by


12 | MONTE CARLO TODAY | DAY 1: Sunday September 13 2015 Caption


13.09.15 SUNDAY


Frank Fortunato


“Controlling the distribution of accurate data can mean controlling the deal.”


increased volatility in the wider financial markets, Butler predicts. He explained that, by adding ILS to a wider portfolio, institutional investors will be able to reduce the volatility of their overall investments. “With volatility expected to increase in the


John Butler


next two to three years, it is understandable that ILS will continue to have an ever-growing place within the context of a broader and more diversified portfolio,” he said. Butler stressed that he sees the ILS market as


an example of an industry that is innovative, one that is developing to address the needs of insurers and investors alike. He is attending Monte Carlo this year with the aim of driving “communication between reinsurers and the capital markets, but also to help bridge the ever-narrowing gap between traditional and alternative investments in the insurance space”. n


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