A life reinsurance data hub has been set up to provide a link between direct insurers and reinsurers in the U.S. market, facilitated by the American Council of Life Insurers in Washington, D.C. and “ri3k,” the London-based technology provider.
The data hub will allow electronic interchange of data between direct writers and reinsurers without requiring manual re-keying, the parties announced last week.
By the end of September 2002, the system is due to be up and running on a limited basis in the United States market, and fully operational by September 2003, said ACLI and ri3k.
It is intended that the platform will be operated by a U.S.-based company to be formed by ACLI and ri3k.
The data hub will reduce the costs of the administration of assuming reinsurance, says Alex Letts, ri3ks CEO, explaining that one of the main costs of the process is the requirement to re-key data and the potential inaccuracies that result.
“It will streamline the data from insurance through to reinsurance and retrocession,” using a single standard ACORD-based format, he says. “It allows data on in-force lives to flow through electronically from one back office to the other back office.”
Currently, direct writers use their own formats when they pass data to reinsurers, which must then translate and re-key that data into their own systems, Letts told National Underwriter.
He notes that this data interchange also will help the retrocessionaires gain an accurate assessment of the lives they have on their treaties, which currently is difficult for them to ascertain accurately.
In a statement, David Atkinson, CEO of RGA Reinsurance Company, says this effort is likely to succeed since the data hub is the result of a joint effort between direct writers and reinsurers, facilitated by ACLI, which “is structured to benefit all participants, not just the reinsurers.”
ACLI and ri3k say the hub has been developed with the support of a cross section of American direct writers, reinsurers and retrocessionaires, which served as a technical advisory group to help with development. Northwestern Mutual Life, MetLife/New England Financial, New York Life, Nationwide, Bankers Fidelity, Swiss Reinsurance, ING Reinsurance, RGA Reinsurance, Manulife Reinsurance and Clarica Reinsurance are members of the advisory group.
Letts says the hub is the result of nine months of work.
“The utility will allow broader access to the life reinsurance process and provide greatly improved efficiency in its administration,” says Jack Bailey, senior actuary, Northwestern Mutual, in a statement. “By automating the inter-change of data, ACLI and ri3k will be helping the industry stay competitive and better serve its millions of policyholders.”
In an interview, Letts said the data hub will help drive standards for the industry. “What we should have, by the end of September next year, is a platform, which is sending out all data related to in-force life policies in one standard ACORD-based format,” he said. “That would be an absolute first for the industry.”
He notes there currently is no standardization for reinsurance transactions. “ACORD sets standards but then people dont drive them; this will drive the ACORD standards.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 22, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.