IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Industry Standard Processes to Operational Excellence
Session 477
2
3
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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
4
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
What’s your company’smost valuable
asset?6
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
7
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
Intelligence?
8
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
Intelligence?
9
“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”.
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
Connection=
Intelligence10
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
11
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
With external partners ANDinside your own organization.Worldwide. 12
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
13
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Value of the Standards
14
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Develop standards by industry consensus • Insurers/Reinsurers• Solution Providers • Associations • Agents/Brokers
Data Standards
15
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Definitions Formats Message Protocols Transaction Specs Implementation Guidelines; Including process definition
Data Standards
16
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
17
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Functions Supported by GRLC
Front Office• Underwriting, Placement,
and • Exposure Reporting
Back Office• Premium• Claims• Settlement
18
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
19
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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.
20
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
21
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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-
22
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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)
23
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
24
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)
23
5
6
7
4
12345678
Insurer (or Lead
Co-Insurer)
Insurance Broker1
Insured
1
2 5
Reinsurance Broker
8
8
8
6
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
23
5
6
4
12345678
Insurer (or Lead
Co-Insurer)
Insurance Broker1
Insured
1
2
8
8
8
6
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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)
28
Brokers and Reinsurers View to Operational Excellence
29
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
30
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
31
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
32
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
33
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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?
34
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
35
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
36
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
37
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
38
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
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
39
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]
IASA 87TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Please Complete the Session Evaluation Form on the Conference App
41