DALLAS, TX--(Marketwired - Feb 11, 2014) - Insurers' numerous reinsurance contracts, pool arrangements, policies and arrays of transactions create a massive risk of having unintended exposure, Joseph Sebbag, CEO of Effisoft USA, writes in Carrier Management magazine.
"Inability to ensure that each insured risk has the appropriate reinsurance program associated with it is a recipe for disaster," he writes. "Having disjointed systems -- a combination of policy administration system (PAS) and spreadsheets for example -- or having systems working in silos are a sure ways of having risks fall through the cracks. The question is not if it will happen but when and by how much."
Other risks to primary insurers include claims leakage, poor management of recoverables, lack of business intelligence capabilities, and inability to track out-of-compliance reinsurance contracts, Sebbag adds.
All these problems can be solved with the right reinsurance management system. But selecting the best system is just the start. Implementing the new solution is the other half of the job.
Before implementation, do a thorough and meticulous preliminary study, he advises.
The article covers all the steps for a successful deployment: data scrubbing before conversion and migration to the new reinsurance system, project management principles, building interfaces with the upstream PAS, and user training.
"Now that you've installed a modern, comprehensive reinsurance management system, you'll have straight-through automated processing with all the checks and balances in place," Sebbag concludes. "You will be able to reap the benefits of a well thought-out strategy paired with an appropriate reinsurance system that will lead to superior controls, reduced risk and better financials. You'll no longer have any dangerous hidden 'cracks' in your reinsurance program."
The full article, "Integrating Reinsurance Management System with Core Systems Reduces Risk," is online at http://tinyurl.com/mbxob62. The article will also appear in the Feb. 28 print edition.
Carrier Management is a new magazine with crucial information for property/casualty executives.
Effisoft USA (www.effisoftusa.com ) is the North American division of Effisoft, founded in 1989 as an independent, expanding, proactive company that respects its commitments towards its clients. It is committed to improving its products and services to provide impeccable support to an increasingly diversified and demanding market. Based in Paris, the worldwide company has more than 300 clients in five continents and 17 countries.