ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW 2015/Sessions/TECH... · • Cross Program Reporting...

IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW

Industry Standard Processes to Operational Excellence

Session 477

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Panelists: • John Canavan, Head of Global CSS, Guy Carpenter• Shawn Sylvester, Senior Vice President Global Business Services,

Endurance • Thomas Neff, Global eBusiness Director , Aon Benfield and Aon Risk

Solutions • Sal Iannaccone, Vice President Munich Re America

Moderator • Maggy Leon, GRLC Implementation Director , ACORD


Industry Standard Processes to Operational Excellence

Agenda Overview of ACORD Value of Standards Reinsurance and Large Commercial Standards and

Processes Global Implementations Brokers and Reinsurers View to Operational Excellence

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What is ACORD?

Independent and Objective Trade Association• Serving the industry since 1970

• Facilitating Industry-driven standards for the industry

Forum for developing standards and promotion implementation

Role in standards:• To provide a legal framework for competitors to work together on

common goals within global competition law guidelines.

• To promote solution-provider involvement to develop technologies enabling current & future implementation.

• To manage the standards process.5


Value of the Standards

What’s your company’smost valuable

asset?6



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Intelligence?

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Intelligence?

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“Intelligence” is defined as “the ability to process multiple streams of information from many sources, each with different concepts attached to them, and accurately find the connections”.



Connection=

Intelligence10



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With external partners ANDinside your own organization.Worldwide. 12



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Develop standards by industry consensus • Insurers/Reinsurers• Solution Providers • Associations • Agents/Brokers

Data Standards

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Definitions Formats Message Protocols Transaction Specs Implementation Guidelines; Including process definition

Data Standards

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ACORD Standards Committees• Global Reinsurance & Large Commercial Committee • Life & Annuity Committee • Property & Casualty Committee • Cross Program Reporting Committee• Country specific Committees – Australia, Southern Africa

The remainder of the presentation will focus on GRLC activities - there are similar activities for each Committee just different transactions and different trading partners – so please feel free to inquire about any of the above

Committees

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Functions Supported by GRLC

Front Office• Underwriting, Placement,

and • Exposure Reporting

Back Office• Premium• Claims• Settlement

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Transaction Sets – Back Office

Technical Account (TA)Establishes debt

Financial Account (FA)Details of payment

Claims Movement (CM)Reports individual claim details

Bordereau Message (BRD)Breakout listings of premiums or claims

Acknowledgement (ACK)Acknowledges receipt/ask or respond to questions

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Unstructured Data

Can be with structured data messages or sent/retrieved separately when needed. Can be any source files such as PDFs,

Word documents, spreadsheets.

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The ProcessSe

nder

CreateTA / CM

Send TA / CM Message

ReceiveTA / CM Message

QueryTA / CM Message

AcceptTA / CM Message

ReceiveL4 ACKN

CreateFA

Send FA Message

Receive FA Message

Reject FA Message

Accept TA Message

Investigate and

ResolveSettlement

ReceiveL4 ACKN

Note: For every CM there is a corresponding TA

<10 Days>

<5 Days> <3 Days>

<3 Days>

Rec

eive

r

Investigate and

Resolve

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ACORD Implementation Communities

What is Ruschlikon? Ruschlikon is a large community of insurers, brokers and reinsurers improving

accounting, claim and settlement administration

All are committed to reshape the industry, through the design and implementation of processes that reduce operational cost and enhance client service

Objectives:Dematerialize the post-placement administration from A to Z Replace paper closings and statements with ACORD standard structured data messagesEnhance service, improving speed, quality and integrity of critical informationImprove the financial agreement and settlement of premiums and claimsEnsure operational excellence by agreeing rules and protocols to deliver business benefits Reduce costs through back-office data integration and process automation

2014/2015 focus • To increase the volume of electronic exchanges within the existing Ruschlikon community with the full

scope of messages and for all contracts • To enlarge the Ruschlikon community through the addition of other major players, thanks to a fine-

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ACORD Implementation Communities

What is Ruschlikon?

2014/2015 focus • To increase the volume of electronic exchanges within the existing Ruschlikon community with the full

scope of messages and for all contracts • To enlarge the Ruschlikon community through the addition of other major players, thanks to a fine-

tuned business case for each implementer category (insurers, brokers, reinsurers)

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Major industry players already implement the ACORD standards and the Best Practices

• Ruschlikon reinsurers represent more than 60% of the global reinsurance market

• The 3 leading reinsurance brokers - all Ruschlikon members - represent 75% of the reinsurance broker market

• The Ruschlikon carriers cover around 50 % of the P&C business written in the London Market

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Ruschlikon business scope: Commercial Insurance, Coinsurance, Reinsurance

Insurer

Insurance

Reinsurer(Retrocessionnaire)

1. Insurance underwriting, direct or via broker2. Insurance broker placement3. Co-insurance placement4. Internal reinsurance5. Reinsurance via broker6. Direct reinsurance7. Reinsurance broker placement8. Retrocession via broker or not

ReinsurerReinsurance Broker

Co-Insurer

Insurer(internal

reinsurer)

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12345678

Insurer (or Lead

Co-Insurer)

Insurance Broker1

Insured

1

2 5

Reinsurance Broker

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8

8

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Reinsurance

Reinsurer(Retrocessionnaire)

1. Insurance underwriting, direct or via broker2. Insurance broker placement3. Co-insurance placement4. Internal reinsurance5. Reinsurance via broker6. Direct reinsurance7. Reinsurance broker placement8. Retrocession via broker or not

ReinsurerReinsurance Broker

Co-Insurer

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5

6

4

12345678

Insurer (or Lead

Co-Insurer)

Insurance Broker1

Insured

1

2

8

8

8

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Global (Re)Insurance Best Practices with target performance standards for Accounting, Claims, Settlement

Best Practices list the community agreements on: Message standards, flows and interactions plus Document Exchange Standards

Workflow timing recommendations

Advised implementation steps

Minimum connectivity requirements26


Anticipated efficiency gains and savings by reinsurers

Expected savings if volumes grow& after system enhancement

Reinsurance Account Reception & id Control Booking

Iterations for error mngt

Process flow

50%

Reception & id Control BookingIterations for error mngt

Reception & id Control BookingIterations for error mngt

Claim advice

Settlement

40%

60%27


What is the (re)insured looking for?

What is the broker looking for?

What is the (re)insurer looking for?

Economical impact: savings, faster cash, impact on capital requirements

Savings Process efficiencies generate (time and) cost reductions resulting from data integration and process

automation

Faster and more accurate cash settlement Speed-up reconciliation of cash positions (link between Technical & Financial Accounts, enable higher

frequency of payment cycles (e.g. daily batches compared to fortnightly or monthly statements)

Impact on capital requirements Eliminate unmatched cash, which can help to reduce capital requirements in the context of

Solvency II (“Inadmissible Assets” rule) and CASS 5 (Client Money rule)Settlement timescales improved by 35%: Average days to settle from payable date to settlement date

Can help to reduce required capital on unmatched cash positions (related to Solvency II / counterparty risk)

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Brokers and Reinsurers View to Operational Excellence

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Reinsurance Broker

(Re)Insurer

(Re)Insurer

(Re)Insurer

(Re)Insurer

(Re)Insurer

(Re)Insured

Increased control and transparency

Single platform access to all markets

Increased speed and efficiency Improved cash flow Immediate, secure and

evidenced delivery of data Reduced risk

What is a (re)insured looking for?

Processing cost reduction Enhanced cedent servicing Consistent, high quality and

properly referenced data feed Access to current data and

documentation Reduced exposure to dormancy

What is a (re)insurer looking for? What is a broker looking for?

Source: SCOR, STRIPE Global Services

Improved cash flow Processing cost reduction Enhanced client servicing Ability to focus on value

added activities Direct straight-through

processing into any market from worldwide locations

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Reinsurance Broker

What a Reinsurance Broker Looking For an Operations perspective?

Enhanced Client Service via:• Competitive environment

• Clients generally demanding increased performance • Quality of service part of the reinsurance buying decision“Demonstrated ability” to pay claimsGreater metrics to clients around performance benchmarking

Improved cash flow to cedents• Ability to focus on value-added activities• Focus on “cycle times”• Reducing non-value added work

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Reinsurance Broker

What a Reinsurance Broker Looking For an Operations perspective?

Increased Efficiency in Transaction Execution • Direct straight-through processing into any market from worldwide locations • On a prospective basis, it eliminates:Unmatched cash, Funding, Retentions and Reconciliations

Enhanced Control Environment• Fiduciary environment• Greater accounting controlsRisk of E&O mitigated

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Reinsurance Broker

Is it a “silver Bullet for Brokers? No, but a critical component of a comprehensive strategy:

• People ImplicationsQuality of Talent Learning & DevelopmentLocation of Talent

• Process ImplicationsProcess Standardization / Simplification criticalEnd-to-End (ETE) ProcessesETE: Processes start with cedents and end with markets

• Technology• Automation of streamlined processesBusiness versus IT Driven ApproachNeed common standards for true ETE

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Reinsurance Broker

Is it a “silver Bullet for Brokers?• We are cooperating on standards to compete in the delivery of value-

added services• How will you differentiate your performance?

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Reinsurance Broker

(Re)Insurer

(Re)Insurer

(Re)Insurer

(Re)Insurer

(Re)Insurer

(Re)Insured

Increased control and transparency

Single platform access to all markets

Increased speed and efficiency Improved cash flow Immediate, secure and

evidenced delivery of data Reduced risk

What is a (re)insured looking for?

Processing cost reduction Enhanced cedent servicing Consistent, high quality and

properly referenced data feed Access to current data and

documentation Reduced exposure to

dormancy

What is a (re)insurer looking for? What is a broker looking for?

Source: SCOR, STRIPE Global Services

Improved cash flow Processing cost reduction Enhanced client servicing Ability to focus on value

added activities Direct straight-through

processing into any market from worldwide locations

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Reinsurer

What is a Reinsurer Looking For An Operations Perspective?• Benefits internal

• Reduced FTE and Contractors• Reduced Cycle TimeBookingClaims ApprovalPayments

• Increased Data QualityVirtually Eliminate Client DiscrepanciesVirtually Eliminate Collections ItemsVirtually Eliminate Unmatched CashVirtually Eliminate all Manual Entry Errors

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Reinsurer

What is a Reinsurer Looking For An Operations Perspective?• Benefits internal

• Increased Focus on Higher Value Tasks• Portfolio Management• Client Focused Audits• Increased Client Servicing

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Reinsurer

What is a Reinsurer Looking For An Operations Perspective?• Benefits External

• Increased client focus from reinsurer experts• Create a differentiator within the market• Establishes a long term commitment “Stickiness” with client• Creates a competitive advantage for reinsurer • Enables clients to leverage a more efficient process internally• Faster Claim Payments• Reduced Cash and Collections activities• Creates a competitive advantage and differentiator for Client

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Reinsurer

What is a Reinsurer Looking For An Operations Perspective?• Benefits External

• Increased client focus from reinsurer experts• Create a differentiator within the market• Establishes a long term commitment “Stickiness” with client• Creates a competitive advantage for reinsurer • Enables clients to leverage a more efficient process internally• Faster Claim Payments• Reduced Cash and Collections activities• Creates a competitive advantage and differentiator for Client

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Need additional information?

For any information on the ACORD standards and/or the Ruschlikon Implementation community, or for applying for ACORD and/or Ruschlikon membership

Contact Maggy Leon :E-Mail Contact: [email protected]


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ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW 2015/Sessions/TECH... · • Cross Program Reporting...

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