The Carriers Perspective Transforming Insurance Operations Simon - - PowerPoint PPT Presentation

The Carrier’s Perspective

Transforming Insurance Operations

Simon Squires - CPO Regional Manager International P&C, XL Insurance

March 2015

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The London Insurance Company Market

• IUA – 40 members plus other London Companies
• Non Bureau - Direct relationships with clients & intermediaries – £7 bn net

pure London Market business

• Global organisations - global networks – global processes
• Desire to leverage efficiencies in transaction validation and payment cycles

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Implementation Communities

Continental Europe United States & Canada United Kingdom Bermuda South America Africa Australia Asia

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Transformational Change 1 2 3 4 5 6

CLIENT SERVICE

• Faster timelines
• Improved data quality

COMPETITIVENESS

• Process Efficiency
• Effective Costs

CREATE VALUE

• Common Language
• Faster Communication

COLLABORATION

• Working together
• Creating Opportunity

COMMUNITY

• Global Stewardship
• Local Implementations

CONSISTENCY

• Global Standards
• Process Guidelines

A new way of doing things – Creating the Opportunity

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• Message Standards, flows and interactions
• Workflow timing recommendation
• Document Exchange Standards
• Recommended implementation steps
• Minimum connectivity requirements
• Target Performance Standards
• Continuous improvement of processing time

Providing Best Practices

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– Commenced with two brokers in Q4

2011- we were the pioneers here in the insurance sector, now trading with six and planning three more

– Now 10000 messages later and live with

six brokers now covering over 65% of the UK portfolio

– Premiums move 30% faster, claim

payments 40%, process efficiency improved by around 30% and elimination

• f unallocated cash

– Globally this is how efficient & modern

insurance organisations now manage

• perations

– Key new go-lives in Singapore and New

York in 2014

– Key plans:- coinsurance messaging,

integration to Genius, retail sector coverage, European & further global coverage, working with Lloyd’s to adopt EBOT as one global insurance standard

Our Story

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Paper / E-mail Closings

• Incomplete documents
• Non standard formats
• No ackowledgement of

receipt required

CURRENT STATE PROCESSING WITHOUT MESSAGING

Manual Statements

• Time consuming spreadsheet

process

• Lengthy agreement

timecycle

• Large query volumes

Delayed Payments

• Inconsistent due dates
• Timeline driven by

reconciliation

• No agreement of items

payable

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Transaction validation

• Tech account (TA) message

sent early, as soon as the broker books the item

• Standard data format
• Complete/accurate dataset

FUTURE STATE PROCESSING WITH MESSAGING

Electronic Reconciliation

• Real time agreement
• Technical/payment

transaction linked

• Team can focus on queried/

unpaid items.

• Early query resolution

Faster Cashflow

• Items paid 15 working days

earlier

• No backlogs - can focus on

key items

• Financial account (FA) sent

as soon as payable

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Case Study 1 – Simple Complexity Risk – ACORD 2008

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Case Study 2 – High Complexity Risk – ACORD 2010

Tax and territory splits in the 2010 message

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The Administrative Lifecycle -Company/Broker Transactions – Past v Future

APRIL MAY JUNE

Inception Date 01/04 Broker Settlement 14/06 Broker Statement Issued 04/06 Booked Broker System 08/04 Paper Closing arrives at Insurer Electronic Technical Account Message Electronic Financial Account Message and settlement Client Paid 17/05 TA Issued 9/04 Accepted 10/04 FA Issued 18/05 Settlement 20/05 FA Accepted 19/05

Broker Events Insurer Events Electronic Events

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• 1. Complete data set

received within 24 hours of broker entry

• 4. Fast query turnaround (10

day target)

• 5. Better communication

TECHNICAL ACCOUNT MESSAGE

TA BENEFITS – THE CHECKLIST

• 2. Up front benefits - early

validation , improved processing

• 7. Integrated standard

processes

• 6. Aggregated data and

improved MI

• 3. Supports back office

integration

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• 1. FA messages batched by

account

• 4. Accept/Reject process - >95%

agreement rates

• 5. Payments will always agree to

transfer

FINANCIAL ACCOUNT MESSAGE

FA BENEFITS – THE CHECKLIST

• 3. Integral links between TA &

FA

• 2. Insurer/Broker agreed

settlement frequency

• 6. (Semi) Electronic reconciliation

process

• 7. Facilitates 15 business day

collection improvement

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Claims Payment Message

• Speeds up claims payment agreement process in similar way to premium cycle
• Provides a solution for correcting claims references
• Delivers a structured approach to accessing supporting documents
• Facilitates accounts administration of premiums and claims in one department
• Reduces the need to make large numbers of individual payments
• Frees the claims handlers to focus on managing the claims

Delivering on the promise to provide certainty in an uncertain world

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Insurer

What next for e-Accounting?

Insurance

Reinsurer

(Retrocessionnaire)

Reinsurance

1. Insurance underwriting, direct or via broker 2. Insurance broker placement 3. Co-insurance placement 4. Internal reinsurance 5. Reinsurance via broker 6. Direct reinsurance 7. Reinsurance broker placement 8. Retrocession via broker or not

Reinsurer Reinsurance Broker Co-Insurer Insurer

(internal reinsurer)

2 3 5 6 7 4 1 2 3 4 5 6 7 8

Insurer (or Lead Co-Insurer) Insurance Broker

1

Insured

1 2 5

Reinsurance Broker

8 8 8 6

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The Right Approach