There is a renaissance happening in the property/casualty insurance industry, and underwriters are at the forefront of the shift back to relevance, according to the leader of XL Catlin.

Michael McGavick admits that he became unpopular with peers when he made an often-quoted speech about the industry losing its relevance four years ago at the International Insurance Society’s Global Insurance Forum in Rio de Janeiro (and at several other events). He addressed the topic again at this year’s Forum in New York City. After outlining five big-picture trends that are impacting the industry in negative ways—globalization, analytics, broker consolidation, alternative capital, and regulation—McGavick presented the positive flip side of the trends, starting with the rise of the underwriter.

“Wouldn’t it be ironic if we had financial crisis to thank,” he asked, referring to the fact that the crisis, which spawned the kind of negative regulatory reaction that has made “capital more dear,” also pushed down interest rates, which is fueling “a rise again in the importance of the underwriting craft.”

“We all know that the industry can get sloppy when it’s easy to make the money back on the investing side.” But these days, with “no interest rate to speak of,” McGavick says that “the primacy of underwriters within the entire ecosystem, within effective companies’ cultures, has risen back to its absolutely proper place. It is the primary purpose of the organism, to create solutions that pool and transfer risk.”

“Long may it last,” he proclaimed.

McGavick also spoke of the wonder of watching “good underwriting minds liberated to play” with expanding data sets. While there are expense challenges for insurers to overcome as they seek to develop creative applications for turning data into meaningful information, McGavick is optimistic about the future of analytics.

“It is giving us new ways to think about risk [and] the potential to unlock entirely new horizons of insurable activity”—in the technology space and outside it. That includes places “we’ve long ignored or been unable to crack, like flood or quake,” he said.

Going on to propose a positive side to the influx of alternative capital, McGavick said: “You always want to be in an industry that is attractive to capital. The alternative is death.”

He conceded that executives in the audience charged with running property-catastrophe reinsurance operations in Bermuda would likely have a tough time seeing a bright side to the increased supply of reinsurance capital. “But the reality is that having that capital interested and comfortable in our sector will be absolutely necessary if we really do create breakthroughs in these other products and opportunities, whether technology or elsewhere.”

McGavick noted that insurers are only taking “a first knock around the door of trying to get back into relevance” with cyber liability products that address breaches of privacy, as technology disrupts the manufacturing and transportation sectors traditionally insured by the industry. “That’s not at all what our clients are mainly worried about. The loss of privacy is a big issue, but it isn’t the same as the issue of the whole economy grinding to a halt and the lost opportunities that are created when companies are brought down, slowed down or stopped by some kind of intervention in their systems.”

Outside capital can help, he said later. “The truth is, while we have a bit too much capital now relative to the existing product set, we have nowhere near the capital to solve the problems we should really be ambitious to solve. That’s the great opportunity–using analytical insight to create new solutions and to harness that alternative and traditional capital, then to provide the ultimate solution.”

Offering a final reason to support his belief that “we’re on the precipice of a renaissance,” McGavick pointed to signs that the industry is clawing its way back from the brink of irrelevance with investments in innovation.

“Economic cycles generally come from simple ideas. People are no longer able to make a profit in one way, so they hunt for another way. That is the natural regenerative economic cycle.”

“The reality is that we have an imperative to our shareholders and those who depend on us to come up with new ways to be relevant.” In simple economic terms, this means “being relevant enough that a customer will knowingly pay us a little bit more than it costs us in order to serve them.”

“That is the virtuous cycle we’re engaged in,” he said. “And when I see the levels of investment now that are being made in new ideas, when I see the level of investments in prime research around critical areas, when I see the kind of reinvestment in new startups in Silicon Valley, these taken together are the industry realizing that it’s an existential threat to be declining in relevance—that the analytics and the capital available will enable us to do new and great things for society and that will get us back to the kind of difference to make that we should be making.”