So it's interesting. One of the last points that Christian was making was about identity and it's in, in the UK, you now have a new service, which says that you can make interbank transfers to your friends using their mobile phone number, which is an interesting ad advancement. So the next question, the next presentation is in fact, related to the finance industry, and this is called the future squared, a cloud of emerging risks in the finance industry by Dr. Yani. So from Swiss Ray. So thank you very much, indeed. Welcome. And we look forward to your presentation.
Good morning, everybody. It was very wise that you avoided to try to pronounce my last name. My name is had, you can call me Danny at the intervals. It's much easier for everybody and I'm working for Swiss. As you can see, my security system is very good because I still use that. So there's not a lot of risk there. So I'm working for Swiss re Swiss re is a reinsurance company. We are having also some direct insurance business until a month ago. I was working as a senior risk manager for the company. Since April, I'm responsible to develop the strategy for big data analytics for the claims process of the company. I know this presentation was gonna be totally different than any other presentation because I'm not an it, I don't have those kind of expertise. I'm lying more or less between the business and the technical people.
So I'm responsible to translate business ideas into technical requirements and make them to surgery is a quite big company. Think of every insurance contract that you can imagine around the world. 10% of that belongs to us. So just to give you an idea about the, the company, but let's cut to the chase now. So you might be wondering why future square, as a matter of fact, me too, because I got the invitation for this bit about last September. I believe then I came up with a title. I had a perfectly good reason why future square, but in the meanwhile, I went for vacation. I changed jobs and I forgot. So I, I tried to come up with a couple of good reasons, but then I decided to be honest with you. So the future square we can discuss actually a little bit later together. And maybe you, you might be able to remind me why future square.
Okay. So let me give you a reason why I'm here last year. I've participated in conference, much smaller co conference in Madrid, generation security was the title and call was there to moderate the, this conference. And I was there because I like to interact with the specialist and I, I like to learn from them. And actually, indeed I learn a lot, but I had the same problem that I have every time that I attend a technical conference, no business people were there. And then I had several discussions with various people that were participating in the conference and all of them were complaining that higher management don't understand what they are telling them, but that is actually what is happening. We are living in different worlds. I don't consider myself on the management side or on the it side, but what I'm experiencing is that the two worlds of those two groups are, are totally different.
So that was my feedback to the organizers. And then a couple of weeks to my positive surprise, I got invited to, to, to speak here, but I'm going to cheat. I'm here again to learn. So I'm going to use this presentation in order to get a little bit of information about my concerns. So I would like to, to have it a little bit interactive, meaning that I would have my first crowdsourcing application, let's say, so I'm going to ask questions. I would like you to, to raise your hand. So is that clear? Actually, that's the first question. Yeah. Okay, good. So
I will try to tell you about the impact of the cloud on the business, both operational and business wise, actually not. I will try to tell you what is my idea about the impact and you are here to validate it or turn it down. So operational, I'm not going to talk about this. This conference is all about data protection, availability. You are much better than me. I, I don't have any questions. We have our OT people that are dealing with all those things, but I'm going to talk about business problems. And by the way, that's the last slide I'm not using usually PowerPoint. So is the cloud going to change the nature of the industry that I'm working for? So I'll give you the motor example. 10% of your costs are insured by us. Okay? And now in order to give you a, a premium that you have to pay for, for the insurance, we collect data for 80 years now, accident data.
We try to find patterns. We have some very smart people in the actuarial departments that are building sophisticated models. We have underwriting underwriters, giving parameters into those models, feeding parameters into those models. And they're coming with a price for you guys. Now I'm thinking cloud mobile technologies. We can collect data even real time. So, and we can analyze them on the spot, driving behaviors, accident patterns, you name it. Even when you buy a car, we, we will know it before you come to us. So should we change our modeling techniques? Should we throw away the data that we're we're collecting for 80 years? What do you think? No, I see some, some, some heads shaking like this and some others saying like that. So do you think that we should adapt and forget what we, what we knew up to now? Yes. So it's a clear, no, I had 1, 1, 1 hand up that's up for discussion.
Actually, I would like to give you another parameter into that. We have driverless cars that are going into the grid. So now imagine of the world of drivers and enthusi that are keep on driving their cars and smart, sophisticated algorithms that are driving other people's cars are the patterns that we are observing all those years going to be valid. I want to ask again. So do you think that we should change the way that we are? We are seeing the industry, the, the, the, the pricing? Yes. Okay. Yes. I think that that's much more encouraging, but it's a 50, 50 still. So I, I would like to talk to everybody if possible, after, after this presentation. So
The risk of changing data, I'm working in a very data driven industry and our clients usually are having a lot of data. We're talking about stealing data, destroying data, losing data, all related to the cloud or not. But my fear is a little bit different. What about changing data? I really, really don't know. Is it possible someone that want to destroy the company I'm working for to go into the cloud and change slightly? My data I'm saying slightly, because we have algorithms that are detecting. If our data that are we're using for the pricing are correct, and they are looking like they are valid, but if you change it slightly, especially in a tight market, when the margins that we have are, are very small. So we call it the soft market that can throw our models totally out of the profit area. And we end up with huge losses. And that is an honest question. Do you think that somebody can go into the cloud and change our data? And the, the thing is that there we are not going to be able to identify why we have those losses because we're collecting data for many years, we are assume that the world is not changing from the one day to the other or the, the patterns that we're using are much longer. So is it possible? Yes.
That, that percentage scared me enough. I think I, I should, I should take that back. Also. You have to think that this can happen also to our clients, as a reinsurer. We ensure insurers. I know the idea is a little bit out there, but there is a valid reason why we can do that. So, and actually our, our clients are using us to mitigate the risk. So we are going to face the same problem with our clients. So, okay. So we changed the way that we're pricing and we're underwriting our risks. That's another question. So we started offering and by we, I mean the insurance industry, cyber liability products, I was scared the very first day that I've heard about this idea. I'm still very much scared. So in, in, in insurance, we usually are underwriting single accounts, meaning that you are coming to us. We are seeing you as an individual, and we are going to give you a price. Is it possible with cyber products or with a cloud to do that anymore? Should we ask our clients in which cloud they are? Because we have an accumulation risk. We have, we are putting everybody on the same place. Actually. There is an idea about how we can work and build, increase a little bit, the resilience of the, of the world. Maybe we
Join forces and we guide all the companies where they should, what is the best cloud for them in order to reduce the risk by maximizing diversification or the other way around, we go to the cloud providers and say, you know, guys, that is how it should look the composition of your clients, because otherwise there is a high risk of destroying this planet. I dunno. So do you think that we should, under, we, we should move from the individual pricing to the crowd, to a portfolio approach? Yes. That's a, actually I'm talking about here. Massive effort is none of this is easy. You know, I mean, we have to change people who are working for 30 years and convince them to do something different. So when I started dealing with risk management, by the way, I'm mechanical engineering background. And at some point I start dealing with risk management first for the investment process. And then for the insurance risk management, one on one, don't put all your eggs in one basket, and now what, what we're doing, we're putting everything in some little, few baskets. So for the risk management point of view, do we have a real accumulation threat there? Yes. I mean, I'm going to come to you at the interval because you are saying yes to everybody. So I, I really want to know what, what's your, your opinion.
Okay. Before I use the li cyber products, as an example, now I'm going to, to promote them to a question. We don't understand the cloud. How, how is it working? We don't, we don't have a history. We don't have any way to apply what we knew for every risk that we are underwriting for, for the cloud and cyber products. Do you think that that might be a possible cause of death for us?
Yes. Yes. Okay. Are you going to give me a job in case that's true. Okay. So, and finally, because the title of my presentation talks about the finance industry and not insurance industry. I'm going to pose also another question markets. I mean, there is a and market hypothesis that assumes that the price of every stock is the fair one, because all the information is in there. Actually that cannot be true because otherwise none of the investors would have a job, but it's a very good hypothesis in order to build very smart mathematical models and have brilliant people working in the finance industry. So now what do you think maybe the cloud and the amount of information that we're storing there is going to make finally the markets efficient and not in the traditional way of the traditional efficient market hypothesis story, but investment finance is all about understanding what is the behavior patterns of the investors. So I'm wondering if all the information that we have about the different investor behavior views, monitored real time is going to create a fair market. Let's say, what do you think? Is that possible? No. Okay. I think that it will eventually, but that's also something that we can discuss on the panel in the afternoon. Thank you very much.
