Risk Data Exchange: Fast and Secure Data Exchange Across the Insurance Value Chain

The insurance industry has recently concluded one of its biggest annual events, the 1/1 (re)insurance renewal.

All the workflows, tools, and technology utilized by the sector get stress-tested during such busy and mission-critical business cycles, and the volume of data analyzed and shared during such renewal periods places enormous strain on insurance workflows and supporting IT systems.

Throughout the year, primaries, reinsurers, and brokers distribute trillions of dollars of assets and millions of risks across the risk value chain. However, during insurance renewals, the distribution of risk data comes into focus for all stakeholders across the insurance value chain.

The requirement for exposure and modeled loss data to flow freely across the industry becomes central to the renewal workflow process.

While the insurance industry has been managing the challenges of sharing large data sets for years, the increased size of insurance portfolios and corresponding granular analytics, combined with the complexities of multiple systems, versioned schema changes, and data format conversion across counterparties is putting heightened stress on existing processes and tools.

In turn, this increases the processing cost in terms of time spent on such low-productivity tasks.

Risk Data Exchange (RDE) is designed to address these issues. The good news is, that in the last 90 days, over 2,000 artifacts (exposures, and/or analysis results) have been exchanged through the RDE.

Let us look deeper at RDE on the Intelligent Risk Platform.

Risk Data Exchange

At the beginning of 2024, Moody’s launched Risk Data Exchange, enabling seamless data exchange across the insurance value chain.

Firms who license applications on Moody’s Intelligent Risk Platform™ (IRP) such as Risk Modeler, ExposureIQ™, UnderwriteIQ, or TreatyIQ, can use RDE at no additional cost, to exchange data with business partners who are also on the Intelligent Risk Platform.

Utilizing the platform’s cloud-native architecture, RDE streamlines the sharing of exposure and results data from one to multiple tenants on the platform.

Setting up the IRP tenant for Risk Data Exchange is simple; using the new Data Exchange Administrator role on the IRP enables a tenant to be authorized for data exchange by creating a ‘Tenant Share ID’ and providing a name that will be visible to trusted partners.

Once the ‘Tenant Share ID’ is generated, share the ID with the business partner you want to exchange data with. Entering your business partner’s ‘Tenant Share ID’ in the approved tenant list under ‘Recipients’ establishes an exchange relationship between your IRP tenant and your business partner’s IRP tenant.

From this point forward, designated Data Exchange users on the IRP can use Risk Data Exchange to share data with approved tenants with just a couple of clicks. No need to export and download the data or use external file-sharing tools such as SFTP to share data.

Simply select the data entity you want to exchange, click ‘Exchange,’ enter the information about the recipient if you know the individual on the receiving side, enter the comment describing the exchange, and click ‘Share’.

Security, Governance, and Compliance

In addition to being inefficient and manual in nature, sharing data using traditional methods such as SFTP suffers from security and governance challenges.

Users relying on external file-sharing services see their data copied in multiple places, including users’ local machines, as part of the sharing workflow.

It also becomes challenging to keep track of all such exchanges and to perform compliance audits.

With Risk Data Exchange, the data never leaves the security boundaries of the Intelligent Risk Platform. The sharing is accomplished by copying the data from the sender’s tenant to the recipient’s tenant through the Risk Data Lake that sits at the core of the Intelligent Risk Platform.

This makes the workflow secure and enables firms to maintain the highest security standards and follow industry best practices during the risk transfer workflow.

Every exchange activity, both outbound and inbound, is reviewed by Data Exchange Administrators. Only upon the approval of the exchange does the data get copied to/from the IRP tenant.

All the data share activities are logged, and administrators can perform audits to monitor or report on what data was exchanged with/by whom.

Use Cases and Utilization

Since its launch in January 2024, the insurance industry has evaluated Risk Data Exchange for various use cases – even the ones Moody’s had not anticipated.

In addition to using Risk Data Exchange to share data with business partners, the industry has also utilized it to exchange data with Moody’s support team in cases where data needed to be shared to analyze the support case.

Risk Data Exchange has also been utilized to copy data between different IRP tenants within the same organization, such as subsidiaries, or between production and non-production tenants.

As I mentioned above, in just the last ninety days, over 2,000 artifacts such as exposures, or analysis results have been exchanged through Risk Data Exchange.

All market segments – including primary insurers, brokers, and reinsurers, have evaluated Risk Data Exchange and validated the benefits it provides.

Many firms have successfully gone through a detailed security review of Risk Data Exchange, putting it under the microscope. We are super happy that all firms received clearance from their IT departments to utilize Risk Data Exchange in production workflows.

As with all other products on the IRP, Risk Data Exchange has been developed with an API-first philosophy. Every operation in Risk Data Exchange has its corresponding publicly documented API and firms have started implementing workflows utilizing these APIs. As more firms use Risk Data Exchange, the product value keeps increasing.

One of the core value propositions of Risk Data Exchange is the process efficiency of the data copy operation. While the value was validated during the product development, the industry has provided additional validation of the efficiency gains by sharing benchmarking numbers with Moody’s.

Risk Data Exchange has been proven to reduce the end-to-end time for exchanging exposure or analysis results on average by a factor of 8-10x.

For example, sharing a 20-gigabyte exposure dataset between two business partners through a traditional SFTP-based process would take two hours end-to-end.

The same activity performed through Risk Data Exchange would take 12 minutes end-to-end.

In this example, the sender can initiate the exchange through a couple of clicks. The data will get copied to the recipient tenant after the required approvals and the recipient user will be able to see and access the exposure data in a matter of minutes.

The efficiency gain grows even bigger as the data file size gets bigger. Large analysis results, containing granular model results on large portfolios, resulting in 50-100 gigabytes in size, would take 20+ hours to exchange with a business partner. With Risk Data Exchange, the processing time would be reduced to less than two hours.

Risk Data Exchange: 2025 and Beyond

While the industry has validated the core value proposition of Risk Data Exchange, firms have also provided feedback on the product capabilities and workflows.

This feedback has become the primary driver of the roadmap of Risk Data Exchange for the coming year. The most asked feature is the ability to create an ‘exchange package’ by adding one or more exposure datasets along with results from multiple analyses, and a few supplemental documents such as Excel, Word, and PDF formatted documents.

Broker clients have asked for the ability to exchange data with multiple recipients in the same operation. In upcoming months, Risk Data Exchange will be able to define a ‘package’ containing one or more exposure, analysis, and supplemental documents as well as group trusted partners into logical groups and exchange packages with a group.

Reinsurance brokers and reinsurers have demanded the functionality of exchanging complex program terms through Risk Data Exchange; this functionality will also be planned for future product releases.

Conclusion

Enabling a seamless exchange of risk data through Risk Data Exchange, the Intelligent Risk Platform continues to build on the vision of an open and collaborative set of applications for use across the insurance lifecycle.

Risk Data Exchange builds on the progress made by the Intelligent Risk Platform by tackling the practical challenges of risk transfer and governance for the exchange of risk data.

To learn more about Risk Data Exchange, and how it supports our customers to unify the risk lifecycle, please reach out to us to request a demo from one of our insurance specialists.