Vol 46: Issue 2 | July 2023
Company: Descartes Underwriting
Title: Head of North Asia and Australia
Ben Qin’s interest in insurance exists outside the mainstream, so his role at Descartes Underwriting should come as no surprise.
As head of the firm’s North Asia and Australia operations, Qin is seeking to expand its parametric insurance coverage to help build resilience against climate risk.
Unlike traditional indemnity insurance, parametric insurance provides pre-agreed payouts based on qualifying events, such as flood heights or specific rainfall levels.
The unconventional nature of its products was a drawcard for Qin, who joined Descartes in 2021.
“I feel that if you walk in the same direction as everyone else, you risk losing your value,” he says. “There’s a lot of comfort in following the same path as all the others, and it takes confidence to go in a different direction, so maybe it’s best to become an expert in the mainstream before you find your niche and venture out.”
A quick learner
Born in China, Qin immigrated to Australia with his family when he was eight and grew up in Sydney’s western suburbs.
“I started at Parramatta Public School in Grade 3 and was given a language teacher because my English was shocking,” says Qin, adding that the first six months were a blur.
“I just remember the teacher had a book with pictures of apples and bananas in it, so they were probably the only English words I knew in the beginning.
I must have caught on pretty quickly, because I got into the school debating team by the time I was in Grade 6.”
Approaching his final year of high school, Qin’s career adviser suggested he channel his love of maths into an actuarial degree.
While completing his degree in commerce and science at Macquarie University, majoring in actuarial and statistics, he was offered an internship at Vero.
“My main memory of my internship is looking at a lot of colourful spreadsheets, but I also learned the ropes of insurance.”
Qin took a graduate role at analytics and actuarial consultancy Taylor Fry and became a founding member of its insurance team, where he consulted on niche products such as title insurance.
A desire for international experience led him to Singapore in 2010, where he worked as actuarial manager for MSIG Insurance, gaining exposure to portfolios within Asia Pacific.
“This was a huge step career wise, because I was suddenly sitting down with CFOs to explain insurance accruals,” says Qin. “I saw a lot of the commercial line that a typical actuary wouldn’t see and did a lot of site visits. When there was severe flooding in Thailand [in 2011], we went to sign off on reports with numbers that had many zeros behind them.”
Qin returned to Sydney in 2012. Following a short stint at IAG, he worked at Marsh for eight years, leading the firm’s alternative risk transfer function for Asia Pacific, before taking up his current role at Descartes Underwriting.
“I’d known the Descartes co-founders for a few years and I knew that they had a dream to do things differently,” says Qin. “When they tapped me on the shoulder to help grow their Asia-Pacific book, I wanted to be a part of it.”
New approach to pricing
Launched in France in 2018, Descartes Underwriting offers data-driven parametric insurance to help address the increasing cost of traditional policies and the natural disasters brought about by climate change.
It combines technology — such as machine learning, real-time monitoring from satellite imagery and data from Internet of Things (IoT) devices installed at insured properties — with publicly available data on natural catastrophes to individually price risks anywhere in the world.
Today, Descartes has more than 200 corporate and public sector clients and US$200 million in capacity per contract.
Qin says the impact of climate change has led to a spike in the company’s growth.
“I didn’t expect the pace of conversion [to parametric insurance] to be so quick, but it has really accelerated because of extreme weather events,” he says. “More people are embracing it, and we’re building up a strong network of loyal clients and broker partners, but we also see huge potential for growth.”
Qin points to the floods in Queensland and New South Wales last year, adding: “The whole insurance industry prides itself on helping people and paying claims, but the problem is that floods were not priced in. The existing models haven’t factored in these flood events so frequently, and so incurring losses outside of expectations has gotten insurers into the news.”
Capacity for risk
Qin describes parametric insurance as “a means to an end”.
“It’s an instrument that allows for rational pricing in the market,” he says. “About 80 per cent of Descartes is dedicated to hard science — from seismology to meteorology — and we’re trying to study the truth behind why extreme weather events happen.
“Basing assumptions on historical events and losses just doesn’t cut it anymore, and there’s thousands of atmospheric variables to study. You can easily access all of this information once you have the infrastructure in place.”
Qin adds that Descartes’ business benefits from its global footprint.
“We balance our book globally, so while we’re paying out bushfire claims in one location, we’re collecting premiums for wet risks in another part of the world,” he says. “You really do need that kind of global capacity to be able to offset risks.”
Crop risks currently account for about a third of Descartes’ underwriting book, and the farming sector is feeling the impact of climate change more than many others. Agricultural profits in countries such as Australia fell 23 per cent over the two decades to 2020.
Last year, Descartes launched parametric frost cover in Australia to help protect broadacre and horticultural crops, orchards, nut farms and wineries. Qin explains that Descartes designs trigger points, such as specific ground temperatures, in partnership with brokers and their clients.
It customises them to suit the locations, long-term regional climate trends and growers’ anticipated losses.
Room for growth
Qin’s international experience has given him a strong understanding of the nuances across the market.
“In places like China, Japan and Korea, where there are huge, state-owned local insurers and cashed-up conglomerates with in-house brokers, the power balance tends to be weighted more towards the local insurers and in-house brokers than the international brokers,” says Qin. “That’s not so much the case in Australia and New Zealand, but I’d say those two countries are quite risk-mature, in that if you’re trying out new things, you can find clients to test it on.”
Despite the differences, each market faces the growing challenge of climate change and Qin sees potential for parametric insurance to expand across the region.
“Parametric insurance is basically about pre-agreed-value policies,” he says. “There’s no argy-bargy because it’s all black and white. It’s a pre-agreed value for a pre-agreed event and you just need robust, ongoing monitoring to make it work.”
Ben Qin was born in China and immigrated to Australia in 1993 when he was eight years old. When he started at Parramatta Public School, he spoke very little English. By the time he was in Grade 6, he was in the school debating team.
Qin started his insurance career in 2007, joining consulting firm Taylor Fry in a graduate role. After gaining experience in large statutory workers compensation schemes, SME personal lines insurance and title insurance, he moved to Singapore in 2010 to take up an actuarial manager role at MSIG Holdings.
He returned to Sydney in 2012 and worked for several months as a reinsurance actuary at IAG before moving to Marsh, where he worked for eight years in roles such as head of alternative risk transfer for Asia Pacific. In 2021, Qin joined Descartes Underwriting as head of North Asia and Australia.
Outside the day job
Qin and wife Jessie welcomed their first child, Oliver, in 2020. Family is now the focus of his free time, but Qin still tries to get to the gym every second day.
Qin recommends rising to new challenges. “Early in my career, people would say, ‘if it’s too hard, or if it’s outside your remit, give it to Ben’, because I always volunteered to take on the stuff that was outside of the mainstream. You can learn a lot by putting your hand up to help others.”
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