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Automated Reinsurance Admin Helps Life Insurers Drive Efficiency

May 4, 2018

Automated Reinsurance Admin Helps Small Life Insurers Drive Efficiency

When it comes to administering a smaller life reinsurance business, many small to mid-sized insurers feel caught in a bind. It would be nice to use software to automate the business, but if you’re small it can seem costly to make the switch.

Instead, they stick to homegrown manual systems, which can be clunky and prone to human error.

It’s time to change this thinking. In the digital age, migrating to software-based administration gets easier all the time and it can bring important, measurable benefits to your business. Take Pekin Insurance, for example, an organization that moved from manual spreadsheets to the automated TAI .NET system. In doing so, it was able to eliminate manual reinsurance administration inefficiencies, cut retention management efforts by 75% and proactively reduce reinsurance business risks.

In the long run, going automated is a prudent, cost effective investment. It can bring immediate gains in terms of data accuracy, it’s scalable and will ultimately improve a smaller firm’s or fraternal organization’s reinsurance administration.

Below I’ll explore four reasons why small insurance companies should automate now and share more on the operational efficiencies Pekin Insurance has experienced since making the switch.

Automated Reinsurance Admin Helps Small Life Insurers Drive Efficiency

Decrease potential for manual errors in reinsurance administration

From a risk point of view, having an automated system will decrease the number of potential errors.

At the end of the day, small insurers have a lower retention rate than larger ones, so they rely on their reinsurance more than the larger ones. If you get it wrong because of manual errors, the implications can be not only costly; the problem will be magnified if it affects a large percentage of the company’s business.

Unfortunately, if you are managing reinsurance administration using spreadsheets, your business is more prone to manual errors caused by typing errors, lack of version control and no log of change.

When Pekin Insurance migrated their manual processes to TAI .NET, they were able to detect and correct errors in 17% of their cessions, that would have likely remained undetected under manual administration.

Automated Reinsurance Admin Helps Small Life Insurers Drive Efficiency

Boost operational efficiency 

In addition to reducing operational risk, automating can also boost operational efficiency.

A small firm may have one or two people administering reinsurance on spreadsheets manually. While that may appear to work fine, it’s taking up time that skilled staff could be using more productively for other important initiatives, such as data analysis, exception handling and compliance regulation.

After implementing TAI software, Pekin Insurance experienced a 50% reduction in time spent processing administration, allowing it’s reinsurance administration team to focus on other responsibilities.

Another way an automated system boosts operational efficiency is by providing a single source of information for your reinsurance administration. Managing the process using spreadsheets requires accessing information from multiple sources which can be time consuming and makes it hard to achieve transparency in reporting. Migrating to an automated system gives you one place to access your data plus provides a single view of your entire reinsurance portfolio and ultimately improves risk management.

Automated Reinsurance Admin Helps Small Life Insurers Drive Efficiency

Eliminate key person risk 

Even if your administration department has more than one or two people, it’s not necessarily static. People retire or take sick leave and replacements need to be trained. Having automated software in place reduces the risk of having knowledge limited to one or more people. Plus having new staff learn how to use a system is more productive than learning the manual processes of a previous staff member.

Automated Reinsurance Admin Helps Small Life Insurers Drive Efficiency

Scalable for insurance companies to grow

Finally, the fourth benefit of moving to automated software administration is that it puts small insurance companies on the same footing as the big ones.

Migrating to TAI .NET gives smaller insurers the same system capabilities as larger firms as well as the advantage of scalability. In the US, this means using the same standardized data formats as 48 of the top 50 insurers in the North American life insurance industry. The system is scalable to your growth and ensures standardized, accurate data throughout. Plus, with leasing options available, price doesn’t have to be a barrier.

Automate your reinsurance administration for operational efficiency, data quality and growth

Moving to an automated system sets up your organization for long-term gains when it comes to operational efficiency, data quality and growth. Read Pekin Insurance’s full case study to discover their full migration experience including how they reduced their time spent performing retention analysis by 75%, expand the types of reinsurance agreements they quote on and gain more accuracy and transparency in reporting.

View Full Case Study  

 

Written by
Brian Traxler