Have you ever tried booking a flight or vacation that was advertised for a great price, only to find out at check-out that an error occurred with their system and it was showing the wrong price? What about something as simple as going to a restaurant and getting served the wrong meal despite being specific when you ordered? In both instances, at some point in the process, the wrong data was transmitted in the system, creating a disappointing experience for you. Now imagine this data mishap occurring in a reinsurance setting. What would happen if treaties were set up incorrectly and policies weren’t being administered according to treaty parameters? This could lead to incorrect Net Amount At Risk (NAR), product mapping, reinsurance premium rate and allowance percentages. And if you aren’t already thinking it… THERE COULD BE HUGE FINANCIAL IMPACT that compromises your ability to manage risk effectively. That is why data quality and compliance is so critical to all parties involved in reinsurance. So how can you reduce the risk of major financial disasters and ensure data accuracy? By investing in quality control processes. Here is why.
Earlier in May, I had the pleasure of attending TAI’s annual user group meeting. For those who have been long time clients of TAI, you’ll come to appreciate that this is one of the premier reinsurance-centric meetings in North America, and a fantastic meeting to network with peers and discuss trends & challenges encountered in reinsurance administration. As head of Marketing, I always encourage staff to speak at meetings and conferences, it is a great way to develop public speaking skills and also share our success stories and learnings. Brittainy and Lisa from our Reinsurance team delivered a breakout session that can act as a great resource to managers or new hires as they tackle the first weeks of their recently hired reinsurance administrators/analysts.
As a reinsurance pro you know that working with data is an integral part of your role. Many of you are using either a homegrown or professional reinsurance system to process data on a daily basis to maintain and administer reinsured policies. For assumed reinsurance, when a policy gets processed and data is received from the ceding company, the system attempts to perform several actions on it that range from Renewals, Status Changes, Face Changes, Terminations and more. But what happens when the action isn’t successfully carried out and the policy is not processed? The answer: An error occurs. BUT not to panic. Part of being a reinsurance analyst is dealing with error management. Today I’ll share with you three common errors I encounter when processing specifically within the TAI reinsurance system and how to overcome them. Regardless of what system you use, these may also be helpful to you.
A question that I often hear from life insurance and reinsurance professionals is ”what happens at the end of a term life insurance product?” Well, the answer is that once it comes to an end, you may have the option to convert it to a permanent product. Converting a policy happens quite often and in reinsurance, it is important to adhere to the terms of the treaty, otherwise, it will cause a downstream impact when claim time approaches. As a reinsurance analyst, we all struggle with administering conversions from time to time, especially in scenarios where there have been many amendments to a treaty or treaty information is difficult to identify. When I administer term conversions like these, there are three questions I typically ask myself to ensure I’m following the guidelines of the treaty. (PS – see here for a great overview of what a Reinsurance Treaty is as well as Seven Essential Components!)
Data integrity is the foundation of a reinsurance analyst’s job. In a general setting, data integrity means maintaining and assuring the accuracy and consistency of data over its entire life-cycle. As it relates to the entire life insurance business operation, data integrity means ensuring there is no mistranslation of transactional data between the insureds, life insurance companies, reinsurance companies and retrocessionaires. Imagine having your life insurance application rejected because your stated income was not filled in correctly. Imagine being charged a higher insurance premium than expected because your insurance rating was not translated correctly into the life administration system. Imagine only receiving 10% of your stated benefits because a zero was missing at some point in time during the transmission of your information between insurance and reinsurance parties
Administrative audits are a certainty in today’s reinsurance industry. And whether you’re a seasoned veteran auditor or a first time auditee, you’ll likely have the same question crossing your mind; “What are the findings going to be?” In many cases, as a reinsurance auditor with new staff or an untested or unproven audit program in place, you want to ensure that your audit team is providing an appropriate attestation of the auditees control environment. Whatever the context, to help you prepare for that upcoming audit, I’ve included a list of five common control gaps that our team of administrative audit experts have come across when auditing on behalf of our Reinsurance clients.
Have you ever been asked to sign a Non-Disclosure Agreement or NDA? If you are in the insurance world, you’e likely had some degree of exposure to NDAs. But are you fully aware of what you are signing when it comes to these legal contracts? Or the impact it might have on you or your company? Regardless we’re breaking down the ABC’s of an NDA to ensure you know exactly what is expected when you sign an NDA.
As you know, approximately every four years we have what's called a leap year, a year with 366 days as opposed to 365. This additional day comes to us in February as the 29th day of the month. Intuitively, many of our clients would assume that 366 days in a year would affect the annual billing of their premiums, as one of the golden rules of annual premium calculation is to always divide by 365. So what happens in a leap year? Well, ultimately, I will address this question with this blog post, and share with you how leap years will not affect the calculation of your billed premiums. Let's learn more on how this is done.
There is an old saying that ‘Everyone is a rookie at least once’. For me, that’s exactly what I was last month when I attended my first RAPA Conference. Set against the backdrop of beautiful Phoenix, Arizona, we spent 2+ days exploring reinsurance topics ranging from data quality, client audits, post level term, and ending the final day with breakout sessions on best practices and lessons learned from our shared community of experts. I sat on a discussion panel with LOGiQ3's Brittainy Pratt, who has also shared her insights. What follows are some thoughts and reflections from that great event, in no particular order, from the perspective of a RAPA rookie:
Being completely new to the concept of reinsurance, I only knew that reinsurance is insurance for insurance companies, but it was after joining LOGiQ3 was I able to understand the concept of one insurer ceding part or all of its own risk on a policy or group of policies to one or more reinsurers in a little more detail. However, reinsurance is a vast concept and can be overwhelming when exposed to all at once. As a reinsurance analyst, I very quickly learnt, that to fully understand and grasp the bigger picture, I had to understand the very basics of reinsurance first. So what is this basic information that I recommend you know if you’re new to reinsurance and reinsurance administration? Here it is: