RISKAfrica Interview - Efficiency is key in a post-pandemic market.

By Tom Freitas | April 21, 2020

This article was originally featured in the April 2020 Issue of RISKAfrica and is republished with permission of RISKAfrica.

As we write this, half the world’s leaders are working out how to kick start their countries’ economies once the worst of the Coronavirus aftermath has passed. Unfortunately, many countries are also still bracing themselves for the full extent of the pandemic to run its course. There can be no doubt the aftermath of COVID-19 is going to continue to reverberate through the insurance industry for months, if not years. 

It is opportune then that we interviewed Tom Freitas, CEO of TAI (Tindall Associates Inc) just prior to news of the outbreak. Opportune because if there is one clear thing, the key to recovery for many insurers is going to be administration efficiency and accurate data management. And administration efficiency and accurate data management are front and centre of the TAI reinsurance administration offering. 

Q: The TAI solution offers insurers access to key data that they may not be accustomed to with their legacy systems. Can you give our readers some examples, and importantly illustrate how accessing this data can improve their treaty management? 

The challenge many of our clients faced before moving to TAI’s reinsurance administration system is the lack of accessibility and synchronisation of their data. Most insurers are administering and reporting their reinsurance using either spreadsheets or a variety of homegrown systems. Leading to inconsistency in how data is classified and managed, and as a result, a potential risk impact. 

By moving to our reinsurance administration platform, insurers streamline and improve their reinsurance data management. TAI provides insurers with a single platform to administer their entire reinsurance programme. From identifying incorrect premium payments to cessions being ceded to incorrect treaties, or even overpayments due to double calculations or incorrect pay percentages, this system is an effective tool for our clients. 

One of the unique aspects of our system is the ability to accept feeds from multiple policy administration and claims systems. This enables the insurer to consolidate their reinsurance programme, generating operational efficiencies and providing a single view of their entire risk retention.

Q: Does the TAI solution allow insurers to manage and even benchmark performance across reinsurers?

In short, yes. This is what we’re built for - integration of multiple sets of treaties from a variety of sources in order to mitigate risk and improve operational performance. Insurers want this, but barriers often exist with limited time or resources to commit to achieving it on their own.

The beauty of our system is that it can deliver insights on how these reinsured blocks are performing. Our reporting provides a look at their data across multiple dimensions. Reports can be run that analyse results for KPI’s specific to their reinsurance program. Our clients gain the ability to leverage visualisations and reports. 

Q: On a global scale, how does the TAI solution stay on top of (sometimes quite disparate) compliance requirements that are in place in different countries?

We have two main levers that we use to stay up-to-date with compliance requirements for our clients. First, we have regular communication with at least 25% of our clients during the year through regular project work, steering committees, and bespoke requests. Through these interactions, we gain valuable insights as to what they need in order to remain compliant in their market or country. 
The second lever is our compliance, security, and regulatory connection to our parent company, RGA, who has dedicated teams and investment in this space.

Q: What excites new TAI clients most when first adopting your software solution, explain if you will some of the aha! moments you’ve seen when explaining the TAI features to a new client?

When we demonstrate our system to clients, there are five key features that really excite them:

  1. User Interface – Many homegrown systems and ‘off the shelf’ reinsurance modules do not have a user interface. Normally, they are black boxes which process the data and produce reporting. This is a workable solution until you need to access and interrogate the data. The TAI system provides the user with access to their entire reinsurance ecosystem. They can view/edit and extract data at an individual policy level.
  2. Retention – One of the biggest pain points we hear from insurers globally is retention. Expanding on this, many of the insurers we interview cite their existing system’s inability to calculate and view retention at a per life level across their inforce book of business. 
    Our system automatically matches policies for an individual life across their in-force book. It not only calculates the retention but also provides the user with the ability to view/edit all policies for that particular life.
  3. Calc Trace – This feature enables the user to review the entire calculation, in detail, for a reinsurance payment (including premiums, commission and taxes) for an individual policy. This enables the user to run their own checks to validate that the system is performing as it should be. It also allows them to answer the regularly-fielded request from reinsurance partners quickly: ‘show me how you are calculating this premium’.
  4. Treaties – Before installing the TAI software, many of our clients were heavily reliant on their internal IT team to set up/make amends to treaties in their previous systems. At times, they would have to wait up to six months for a change to be completed due to other higher priority requests from the business. This poses a significant operational and financial risk to the business. They are reliant on manually ensuring policies are mapped to the correct reinsurance treaty and manually calculating the reinsurance premiums. The TAI system empowers the user
    to administer treaties themselves, with no need for IT intervention. Users can easily set up/amend treaties, including adding new rates and products.
  5. Audit – Our system provides the client with comprehensive auditing facilities. For example, every time someone accesses the system and/or makes a change within the system, the audit log is updated. By comparison, manually-updated spreadsheets don’t have audit facilities.

A key aspect of the TAI system is role-based access. The client has the ability to decide who and what parts of the system their users can view and/or edit. When a reinsurer visits to conduct an audit, the client can provide them with specific access only to the data associated with their treaties.

Q: What makes Sanlam a good fit with your brand?

TAI prides itself on three key pillars underpinning our business– innovation, culture and partnership. We see these same themes running richly through our newest client, Sanlam.

Innovation - We continuously strive to innovate and improve our existing system and release new products. We aim to listen to the needs of our client and deliver solutions which improve and add value to our client’s businesses. As an example, we will soon be launching a treaty digitalisation product which will transform the way Insurers manage their treaties in the future.

Culture – The success of TAI is based entirely on our dedicated team and our strong culture, which continuously run through the veins of our business. We see this same trait within Sanlam. 

Partnership – Every client who joins the TAI family is treated as a partner and not always a typical supplier-client relationship. We believe in partnering together to solve problems and deliver solutions to benefit both parties cooperatively. 

Q: How complex is onboarding a new client? 

It’s a streamlined process for new clients. Our onboarding team includes three or four individuals whose primary roles are programming, business analysis, and project management. We also recommend a monthly steering committee meeting where we bring in the client’s senior management team to meet with the TAI team to ensure that the new installation is hitting key milestones and is meeting the businesses’ needs. 
We follow a dedicated process to gather, analyse and test the data before it’s put into the live environment. This occurs in four phases which can take anywhere from nine to 15 months, depending on the size and complexity of the block of business:

  1. First, we spend time summarising and compiling all of our client’s treaty terms and parameters (retention schedules, premium factors, allowances, etc.) into a structured format to prepare the data for testing.
  2. Next, is validation, where we identify any discrepancies that exist between actual treaty values and the values coded in the administrative system. At this stage, we make any customised modifications to our software to reflect the products and/or processes of the individual client.
  3. Then, we conduct 100% cession-level testing to ensure compliance of the individual policies to treaty terms and correct premium payments.
  4. Finally, we compile all exceptions found at each phase of testing and quantify the impact of them from a financial and risk perspective. 

Q: Is it sometimes frustrating to see a new client not fully utilising the TAI solution’s full capacity?

We realise that the system is feature-rich and is a continuous learning opportunity for our clients. TAI offers training to support our clients, as well as FAQ’s, blogs, and a comprehensive user manual and access to our Help Desk. 
However, due to the fact that each new implementation is ultimately customtailored to meet the specific processing needs of each client, sometimes they don’t fully appreciate the expanded reinsurance controls provided by the TAI system until well after the initial implementation of the TAI system.
Also, there are certain audit reports that may be utilised immediately after implementation (such as a reinsurance audit, an insured ID/name audit, and a retention check audit), and other ‘base’ audit reports, which can require several months of processing in a live environment to begin to realise their potential. 

Q: What are some of the reporting functions available to clients at treaty renewal or negotiating time?

Understanding the financial performance of a block of business is necessary to negotiate reinsurance terms effectively. However, the challenge is providing the information for a variety of stakeholders so they have insights that are useful to them. This is something we’ve addressed in our reporting functionality, or “Insights” as it’s known to customers. 
For those seeking to understand volatility, profitability, and spread of risk, the system allows users to launch reports that provide this level of insight quickly. It also offers a more granular look at treaty performance, including total inforce count, new inforce count, and terminated amounts. 

Q: Could you give our readers some idea of the different reports available to your clients, reports that new clients may not be aware of perhaps?

Our system offers a multitude of reports, so it can require some time to become proficient. For those familiarising themselves with TAI, the typical focus is on monthly reporting for reinsurers and internal stakeholders. They can include accounting, actuarial, audit, risk and management. All of our reports are compiled at a summary and seriatim level. 
In addition to the vast library of reports, users can easily extract data themselves from the system without the need for IT intervention. Data can be mined from individual screens, or they can use the system’s data query facility to construct customised data extracts. Finally, we are also able to design any bespoke reports that are needed by our clients.

Q: The world is entering a challenging and complex period, a time where accurate data and reporting is more essential than ever, can you give our readers some examples of how TAI can help insurers navigate through troubled times?

Reinsurance arrangements are excellent at managing risk, and the backbone of any reinsurance arrangement is proper reinsurance administration. Both parties to a reinsurance transaction demand accurate and complete transactions so that the risk is bound properly and if there is a claim both parties understand their obligations.
TAI’s platform is engineered to ensure that each policy is assigned to the appropriate treaty, the proper premium is paid, and that reinsurance claims are accurate. Creating transparency and accuracy is how TAI helps its clients manage their business as efficiently as possible, both operationally and financially.