(Photo credit: Maf.)
The Motorists Insurance Group ’s (Columbus, Ohio; $680.8 million in net written premium) ceded reinsurance program suffered some of the typical inefficiencies resulting from multiple systems, and in particular, a reliance on Microsoft Excel and Access for tracking reinsurance claims. As the program grew in size and complexity, inefficiencies compounded, resulting in increased inefficiency.
“We had disparate systems and labor-intensive processes,” comments Tom Brock, assistant VP, finance, Motorists. “To ensure accuracy, we maintained a lot of downstream checks and balancing routines that were very inefficient.”
To address these inefficiencies, Motorists sought an integrated system that would provide increased access to reinsurance data, stronger controls and improvements in the way the carrier processed, reported and analyzed information used by the ceded reinsurance program. Motorists underwrites a variety of personal and commercial products and pays about 60,000 claims annually. Those claims must be monitored to determine amounts recoverable under reinsurance treaties, and compiling the related data took a staff member about four hours a day, according to a Motorists source.
Superior technical knowledge
Motorists selected Effisoft USA as its partner in the ceded reinsurance systems modernization effort, based on the vendor’s superior level of technical knowledge and demonstration that it thoroughly understood the insurer’s needs, according to Brock. He reports that the biggest challenges revolved around how Motorists accounts for its catastrophe-related claims. “Effisoft’s effort went far beyond the usual,” he says. “Their team overcame every obstacle.”
The solution was built on Effisoft’s WebXL system, modified to Motorists’ needs. Customizations included aggregate excess calculations, new catastrophe management, and enhanced cash call functionality. Effisoft also built interfaces to the COSMO claims system shared by Motorists’ main operating carriers. The WebXL-based solution was tapped to administer all ceded reinsurance for Motorists’ personal property/casualty, commercial property/casualty, workers’ compensation, catastrophe, and boiler & machinery claims. Effisoft completed development in three months and then led a training session for Motorists’ staff, according to a vendor source.
Among the gains Motorists has enjoyed from the WebXL implementation is the reduction of staff dedicated to reinsurance-related processes from three to one-and-a-half, owing to the elimination of spreadsheet-driven processes, according to Brock.
In terms of gained productivity, Motorists’ personnel now has quicker access to important information, Brock affirms. “If we’re facing a situation where a reinsurer is going through insolvency or poses a notable credit risk, we need to assess our exposure,” he offers by way of example. “Now we can get our hands on that information so much easier and faster.”
The Effisoft solution has also given Motorists a centralized repository for all reinsurance data, according to the vendor source. WebXL’s reporting tools help isolate claim experience and identify weather trends and severity, as well as helping Motorists work more effectively with outside parties, such as rating agencies, reinsurers, brokers, external auditors and state examiners.
Greater ROI on the horizon
Motorists expects to see its investment in the Effisoft demonstrate further value around the turn of the year, when the carrier prepares Schedule F reporting for its operating companies. “It’s a very time-consuming process with a fair amount of complexity,” Brock notes. “WebXL will help us.”
Brock declares the initiative a success from both an operational and financial point of view, noting that hardware costs were minimal because WebXL runs on a standard PC. “We’re extremely happy with Effisoft and WebXL today, and we have a lot of opportunities to get greater use out of the tool tomorrow,” Brock comments.