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Oakland, CA, June 23, 2010 – Automation continues to be a major issue of concern with P&C reinsurance administration, based on a recent survey conducted by StoneRiver. The company’s third annual survey asked chief financial officers at U.S. property and casualty (P&C) insurance carriers about their experience with reinsurance administration. The goal of the survey was to uncover industry trends for 2010 and early 2011, track interests and learn strategic direction for automating reinsurance administration.
For the third year the lack of reinsurance automation is the hottest reinsurance issue at participating companies (43 percent). This is of interest because all respondents this year rated their companies as average or above in how well they manage reinsurance recoverables. The organizational concern might result from not having automation for aggregation in the event of a catastrophe. Another possible explanation is that the respondents feel comfortable with the status of reinsurance recoverables, but face concern from others about the lack of automation. An entirely automated system dramatically reduces the likelihood of errors due to manual processes.
Concerns about the Model Audit Rule and potentially inaccurate spreadsheets tied for the second hottest issue, at nearly 36 percent. Roughly 29 percent said their hot issue is personnel who know reinsurance have left the company or are planning to retire.
When asked how their companies manage reinsurance administration, 47 percent said the management is automated. However, a wide majority (82 percent) reported that collections management continues to be performed by spreadsheet or manual methods. Less than half responding (44 percent) already use a ceding engine for reinsurance administration, compared to 2009’s 53 percent and 36 percent in 2008. This year 31 percent have a system that automatically identifies and attaches reinsurance per contract terms. In 2009, 47 percent had that capability and in 2008 only 29 percent had it.
Other data shows that nearly 36 percent indicated that the current market has had no impact on the company’s reinsurance book. Likewise, nearly 36% also reported that they are reinsuring even more as a result of the market.
“This type of research is an important part of our product development research,” states Gary Sherne, President, StoneRiver – Insurance Solutions. “Conducting an annual survey in key segments allows us to monitor that market, listen to our constituents and gather information pertinent to our business strategies. The low levels of automation, especially in collections, indicate that this space is underserved and that there are significant opportunities to improve processes through automation,” concludes Sherne.
StoneRiver has historically found that reinsurance administration automation exposes leakage in collections, and carriers’ improved recoveries have quickly paid for new solutions deployed. The complete results overview is available for download at stoneriver.com.
About the StoneRiver Reinsurance Solutions
StoneRiver offers reinsurance solutions to manage reinsurance for ceded, assumed, retroceded, pools and affiliates. The systems automate attachment, calculation, audit trails, SOX compliance, and posting of premium and loss cessions. Support for managing receivables and payables are included. Statutory reporting, including Schedule F and Schedule P is also supported. Complete audit trails are available. The automatic calculation of reinsurance cessions eliminates most manual processes, significantly reducing effort spent on time-consuming tasks.
About StoneRiver
StoneRiver Reinsurance Solutions delivers the industry’s widest range of technology solutions and services to insurance carriers and broker-dealers. This versatile product group encompasses front-office, policy, claim, rating, underwriting, billing, reinsurance, financial and compliance solutions for all major business lines. Hundreds of companies rely on StoneRiver software and processing solutions to achieve a competitive edge. StoneRiver promotes client success by streamlining complex business processes. Visit stoneriver.com for more information.
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For more information contact:
Lori Soppe, VP, Public Relations
StoneRiver
319-398-0548
lori.soppe@stoneriver.com