Reinsurers still face challenges digitalizing claims

Register now

One insurance sector that’s strongly resisted digitalization until now is ceded reinsurance. But with a variety of software for reinsurance claims management increasingly available, that may be changing.

Still, challenges remain. One is the common practice of tracking reinsurance claims manually, using spreadsheets. Inevitably, this leads to some claims getting lost in the shuffle.

Another is the familiar “hours clause,” which limits a single claims incident to a duration of 72 hours. Incidents that last longer than 72 hours require setting up separate instances.

To maximize their reinsurance recoverables, Grégory Moliner, CEO of Effisoft USA, a reinsurance software developer, says insurers should deploy a ceded reinsurance system with an algorithm designed to optimize such claims.

To help insurers navigate the complexities involved in implementing such as system, Moliner makes the following recommendations:

Map out the reinsurance process. The usefulness of reinsurance systems “depends on how tightly it’s integrated with core policy administration and claims systems,” notes Moliner, who advises conducting a preliminary study before installing the software. “The study should include a detailed description of the company’s reinsurance management processes and identification of potential gaps between those processes and the proposed solution,” he states. In addition, “The study should also identify the contracts and financial data needed, establish interface specifications, define the data conversion and migration strategy and gather all reporting requirements.”

Map the core systems to which the reinsurance system should connect. “The ceded reinsurance data will need to be integrated with other applications, such as the general ledger, the claims system and business intelligence tools,” Moliner explains.

Automate as much as possible. While many insurers are still making do with manual reinsurance processes, automation, Moliner asserts, will become a necessity as catastrophe reinsurance becomes more widespread and complex.

Given this week’s events in Texas, he no doubt has a point.

For reprint and licensing requests for this article, click here.
Reinsurance Insurance technology Core systems Claims Business intelligence Policy adminstration Software integration
  • The company said the move would free up money to spend on new technology and more marketing of its Allstate brand.
    1h ago
  • Climate change is now the second biggest worry overall, but the views vary geographically as it remains the top priority in Europe but falls to the third place in the U.S. and Asia.
    1h ago
  • If long-term market trends were already driving greater demand for digital adoption, the COVID-19 pandemic has only served to accelerate them.
    September 30
    Colleen Wells
    VP product strategy
  • There’s little in business or in life that hasn’t radically changed in the last several months by COVID-19. As a result, most corporate CEOs and companies have had to shift their priorities as they approach month six of the crisis. Insurance companies with whom we work have put in place well thought-out survival strategies to ride out the storm and are now beginning to focus their attention on three things: lowering operating expenses, managing losses while optimizing underwriting excellence, and driving efficient growth.
    September 29
    John Rodgers
    COO, Managing partner
    SSA & Co.
  • The proposed rule changes would ensure that when people renew their policies they pay no more than new customers buying coverage for the first time.
    September 28
  • The Ring Always Home Cam moves autonomously and is equipped with an indoor camera, giving users multiple view points of their homes.