Insurance companies have always been leaders in dealing with uncertainty. The difference today is that the threat environment has become more volatile.
Executive SummaryThe risks faced by insurance companies are extraordinary and require a new method of planning—one that is constantly updated in near real time based on data from myriad sources and acted on through a combination of AI and specialized human experts, write FTI consultants. Here, they introduce the idea of Dynamic Planning, a system with roots in the Apollo program, to enable insurance carriers to increase intelligence related to threats from natural hazards and systemic risks and to improve planning for the uncertainties of tomorrow's evolving "normal" while dealing with the day-to-day operation of business.
Climate change has made natural disaster threats more pervasive, frequent and severe. And now we have the added impact of the global coronavirus pandemic. These circumstances increase the uncertainty of liability and opportunity outcomes. In this environment, insurers must improve their ability to meet the challenges of that increased uncertainty.
The risks insurers must understand and react to require a new method of planning—one that is constantly updated in near real time based on data from myriad sources and acted on through a combination of AI and specialized human experts. Enter Dynamic Planning.
Dynamic Planning is not new. Its origins go as far back as the Apollo space program, when engineers sought a better way to improve quality. Dynamic Planning has evolved in the aerospace, manufacturing and military arenas as an effective tool for dealing with uncertainty. Insurance carriers, too, can adapt Dynamic Planning to plan for the uncertainties of tomorrow’s evolving “normal” while dealing with the day-to-day operation of the business.