Insurance jobs will inevitably go over the next decade as the role of technology grows in the industry — and the survivors will be problem-solvers who show they can add value to their companies.

That was one of the takeaways from a panel at the Bermuda Insurance Market Conference at O’Hara House yesterday.

Industry veteran Stephen Catlin sparked the jobs topic after he remarked that the industry’s processes had seemed very “Noah’s Ark” when he started out in the industry in 1973 — and he holds the same view today. Modernisation was essential, he said.

“If we don’t do it to ourselves, it can be done to us,” Mr Catlin said. “When I hear that Google is investing $350 million into just exploring opportunities within the industry — we’re just a pebble on the beach.”

Quadruple data entry had to stop he said, process had to be streamlined and the industry had to learn how to utilise artificial intelligence to make use of growing data.

“If you look at what Amazon has done to the entire retail sector, just think what could happen to us if we don’t take this seriously,” Mr Catlin said.

“If you’re aged between 35 and 50 and you don’t embrace change, you’re going to be part of the 50 per cent, in five or ten years time, that doesn’t have a job.

“The fact of the matter, I’m sad to say, is that bringing in technology is going to save on cost, and one of the biggest costs is headcount.

“If you start using algorithms to price business, the role of the underwriter diminishes. If you start thinking about online distribution, the role of the broker diminishes.

“Don’t misunderstand me. Our business is specialist and complex and you do need human intervention on complexity. While I think technology will be able to do a lot within five or ten years, I don’t think we’re going to be able to get rid of the human being who’s required to understand and translate.”

Mr Catlin said that survivors would be those who embraced change, not those with the attitude of “it’s not like it used to be”.

Fellow panellist Shannon Totten, head of excess casualty at Sompo International, agreed. “As a manager, I always appreciate it when people come to you with a problem and say, ‘here’s an idea to help you solve that problem’,” she said.

“There are plenty of people who raise problems and sometimes cause problems and have no path forward. I’m always happy to embrace those with the proactive approach to solving their problem, my problem and the problem of the team — and most importantly the problems of our clients.

“The whole industry will increase in relevance when we find ways to insure brand new, emerging technologies for which we have no past data.”

The importance of problem-solving abilities grew in merger situations, Jeff Sangster, the former chief financial officer of Validus Holdings, added.

“There are all kinds of problems to be solved and you can see that as an opportunity,” Mr Sangster said. “If you’re bringing teams together, then rather than worrying about what 15 per cent are going to get laid off, and you’re the one on the front foot, solving the problems of how to put those teams together, then you’re going to survive every time.”

Insurtech ideas are proliferating, but Mr Catlin estimates that about 85 per cent of them will come to nothing. Mr Sangster suggested it would be more like 95 per cent.

“A lot of them are good ideas and they have great technologies, but they don’t understand the industry,” Mr Sangster said.

“That’s an opportunity for the people in this room, who do understand the industry and who can find one of those really smart Silicon Valley guys who wants to solve problems for insurance and to tell them what those problems are.”

Mr Catlin also commented on consolidation in the broker sector, most recently Marsh and McLennan’s takeover of JLT. He said it would put pressure on carriers, who would have less choice.

“It was well known in the market that probably 80 per cent of the JLT staff were at JLT precisely because they weren’t part of the top three,” he said.

“A lot of JLT staff came from the top three. So they’re not going to be happy bunnies.”

He added that he thought the consolidation trend would continue among brokers, but that the result would probably be a new generation of smaller brokers cropping up as carriers sought more choice.

Mr Catlin has a 45-year track record in the industry, and led Catlin Group for three decades, having built it from scratch and developed it into a global insurer and reinsurer that was sold to XL Group for more than $4 billion in 2015.

He retains a strong interest in the island.

“I think Bermuda is unique,” Mr Catlin said. “The Government and the regulator work together with a common interest. You do not see that in Europe or the US.

“So I think Bermuda has a tremendous opportunity going forward. It’s a vibrant marketplace and something like 40 per cent of the Lloyd’s of London capacity comes from capital from this island.

“Like any other economy, Bermuda has its challenges. I think I’d rather have Bermuda’s challenges than the Brexit challenges though.

“I think there’s a great future. I’ve recently bought a house here and I’m very glad to be back and to be part of the community.”

Yesterday’s conference, which included a full day of panel discussions and presentations, was organised by the Bermuda Insurance Institute.