Ceded Property and Casualty Reinsurance Solution Spectrum: 2016 Global Edition
Celent has released a new report title Ceded Property and Casualty Reinsurance Solution Spectrum: 2016 Global Edition.The report was written by Donald Light, Director in Celent’s North America Property/Casualty Insurance practice and Luis Chipana, Analyst in Celent' Insurance practice.
The core business of insurance companies is to manage the risks from the policies which they write. Often they will reduce that risk by transferring some amount of it to a reinsurer. In this context primary insurers are defined as insurers that either do not usually assume reinsurance from other insurers, or do so in amounts that are not financially material.
The world has no shortage of natural and man-made disasters. Shifting tectonic plates, aberrant weather patterns, domestic and international political instability, and even new technologies (e.g., nanotechnology, cyberattacks) present risks that insurers exist to mitigate.
There is increasing interest among primary insurers in reinsurance solutions that provide recordkeeping and execution capabilities to make reinsurance programs provide the value they were designed to provide. In this report, Celent profiles 15 ceded reinsurance solutions from 14 vendors. The report looks at the solutions’ functionality, technology, customer base, and geographic footprint.
A ceded reinsurance system has six core elements: contract administration, underwriting support, a premiums and commissions calculation engine, a claims calculation engine, technical accounting functionality, and financial accounting functionality.
“The cost of not having a reinsurance system can negatively impact company results. Without a system, some insurers have discovered that, at best, they could not provide accurate snapshots and projections to senior management, investors, and rating agencies,” comments Luis Chipana, analyst in Celent’s Insurance practice and coauthor of the report.
“At worst they have tens or hundreds of millions of dollars of unrecoverable reinsurance recoverables, or are out of compliance with applicable laws and regulations,” adds Donald Light, Director in Celent’s North America Property & Casualty Insurance practice and coauthor of the report.