Legacy reinsurance systems usually cannot support increasingly complex reinsurance arrangements. (Photo: Shutterstock)
Many insurers of all types and sizes have come to rely on reinsurance as a tool to help grow their businesses or protect their balance sheets against unforeseen events. For that reason, reinsurance administration is essential to maximizing the benefits of reinsurance and ensuring confidence in the solvency of the business. Yet the systems that drive their workflows and enable consistent, high-quality outcomes are proving themselves to be antiquated and in need of investment and modernization.
Legacy reinsurance management systems built on common business-oriented language (COBOL) or relying on Microsoft Excel/Access can't support increasingly complex reinsurance arrangements and require manual, labor-intensive work that is prone to errors. It's no wonder that 62% of senior executives responsible for ceded reinsurance activities cited operations as the area they struggle with most (Deloitte, 2020). The cost of these struggles can come in many forms including financial (missed recoverables), opportunities (inability to perform value-added work), and reputational (poor relationships with reinsurers).
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