Industry Standard Processes to Operational Excellence

Transcription

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2 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 3

4 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

5 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

6 Value of the Standards What s your company s most valuable asset? 6

7 Value of the Standards 7

8 Value of the Standards Intelligence? 8

9 Value of the Standards Intelligence? 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. 9

10 Value of the Standards Connection = Intelligence 10

11 Value of the Standards 11

12 Value of the Standards With external partners AND inside your own organization. Worldwide. 12

13 Value of the Standards 13

14 Value of the Standards 14

15 Data Standards Develop standards by industry consensus Insurers/Reinsurers Solution Providers Associations Agents/Brokers 15

16 Data Standards Definitions Formats Message Protocols Transaction Specs Implementation Guidelines; Including process definition 16

17 Committees 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 17

18 Functions Supported by GRLC Front Office Underwriting, Placement, and Exposure Reporting Back Office Premium Claims Settlement 18

19 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

20 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

21 The Process Sender Create TA / CM Send TA / CM Message Receive L4 ACKN Create FA Send FA Message <5 Days> <3 Days> Receive L4 ACKN Investigate and Resolve Investigate and Resolve Settlement Receiver Receive TA / CM Message Query TA / CM Message <10 Days> Accept TA / CM Message Receive FA Message Reject FA Message <3 Days> Accept TA Message Note: For every CM there is a corresponding TA 21

22 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 messages Enhance service, improving speed, quality and integrity of critical information Improve the financial agreement and settlement of premiums and claims Ensure 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 IASA scope 87 TH of ANNUAL messages EDUCATIONAL and for all CONFERENCE contracts & BUSINESS SHOW To enlarge the Ruschlikon community through the addition of other major players, thanks to a fine- 22

23 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 finetuned business case for each implementer category (insurers, brokers, reinsurers) 23

24 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

25 Ruschlikon business scope: Commercial Insurance, Coinsurance, Reinsurance Insurance Reinsurance Insurer Co-Insurer 6 1 Insurance Broker Reinsurance Broker 7 Reinsurer 1. 1 Insurance underwriting, direct or via broker 2. 2 Insurance broker placement 3. 3 Co-insurance placement 4. 4 Internal reinsurance 5. 5 Reinsurance via broker 6. 6 Direct reinsurance 7. 7 Reinsurance broker placement 8. 8 Retrocession via broker or not 8 Insured 1 Insurer (or Lead Co-Insurer) 4 Insurer (internal reinsurer) 6 8 Reinsurance Broker 8 8 Reinsurer (Retrocessionnaire)

26 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 requirements 26

27 Anticipated efficiency gains and savings by reinsurers Reinsurance Account Process flow Reception & id Control Booking Iterations for error mngt Expected savings if volumes grow & after system enhancement 50% Claim advice Reception & id Control Booking Iterations for error mngt 40% Settlement Reception & id Control Booking Iterations for error mngt 60% 27

28 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 Can Technical help to & Financial reduce required Accounts, enable higher frequency of payment cycles (e.g. daily batches compared to fortnightly or monthly statements) Impact on capital requirements Settlement timescales improved by 35%: Average days to settle from payable date to settlement date 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) capital on unmatched cash positions (related to Solvency II / counterparty risk) 28

29 Brokers and Reinsurers View to Operational Excellence 29

30 Reinsurance Broker (Re)Insurer (Re)Insurer (Re)Insured (Re)Insurer (Re)Insurer Source: SCOR, STRIPE Global Services (Re)Insurer What is a (re)insured looking for? What is a broker looking for? What is a (re)insurer looking for? 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 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 Processing cost reduction Enhanced cedent servicing Consistent, high quality and properly referenced data feed Access to current data and documentation Reduced exposure to dormancy 30

31 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 claims Greater 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

32 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 controls Risk of E&O mitigated 32

33 Reinsurance Broker Is it a silver Bullet for Brokers? No, but a critical component of a comprehensive strategy: People Implications Quality of Talent Learning & Development Location of Talent Process Implications Process Standardization / Simplification critical End-to-End (ETE) Processes ETE: Processes start with cedents and end with markets Technology Automation of streamlined processes Business versus IT Driven Approach Need common standards for true ETE 33

34 Reinsurance Broker Is it a silver Bullet for Brokers? We are cooperating on standards to compete in the delivery of valueadded services How will you differentiate your performance? 34

35 Reinsurance Broker (Re)Insurer (Re)Insurer (Re)Insured (Re)Insurer (Re)Insurer Source: SCOR, STRIPE Global Services (Re)Insurer What is a (re)insured looking for? What is a broker looking for? What is a (re)insurer looking for? 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 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 Processing cost reduction Enhanced cedent servicing Consistent, high quality and properly referenced data feed Access to current data and documentation Reduced exposure to 35 dormancy

36 Reinsurer What is a Reinsurer Looking For An Operations Perspective? Benefits internal Reduced FTE and Contractors Reduced Cycle Time Booking Claims Approval Payments Increased Data Quality Virtually Eliminate Client Discrepancies Virtually Eliminate Collections Items Virtually Eliminate Unmatched Cash Virtually Eliminate all Manual Entry Errors 36

37 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

38 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

39 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

40 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 : Contact:

41 Please Complete the Session Evaluation Form on the Conference App 41