Life reinsurance treaties are the source of truth when it comes to reconciling data errors or exceptions discovered while administering reinsurance. However, oftentimes, they are historical documents that are difficult to read and time-consuming to review when researching discrepancies or inconsistencies. Having processes in place to reinforce the quality of treaty data within reinsurance administration operations is becoming an increasing priority for organizations. We believe that proactively conducting treaty reviews can help companies achieve data accuracy and integrity.
Having helped our clients review over 400 treaties and having developed a strong and repeatable methodology for success, we recognized that there were still major opportunities for improvement. That’s why we turned to Artificial Intelligence (AI) to enhance our treaty data and compliance review solution.
We are excited to take you on our journey as we bring this AI treaty review solution to life! Subscribe here to receive video updates that share project milestones, methodologies, behind-the-scenes look and more! In the first update, Brian Wilkinson provides an overview of why we believe AI was the right step towards drastically improving our industry’s relationship with reinsurance treaties.
7 Challenges Associated with Reinsurance Treaties
Ahh, where do I begin. Being part of the reinsurance industry, I am sure you can relate to at least one of the challenges associated with dealing with and administering treaties:
- Inconsistencies between treaty language and the reinsurance administration system
- Data constraints from legacy administrative systems
- Lack of expertise and knowledge around acquired blocks
- Evolving treaty requirements in changing industry context
- Ageing and deterioration of source documents in multiple formats
- Formatting clarity and broad interpretations
- Human error caused by manual input processes
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But have you thought of the impact these challenges can have on a larger scale within your organization? Many can lead to erroneous data which impacts financial predictability and stability within the organization.
Another challenge is that the value of treaty data for organizations lies dormant in a pdf, on a shared drive, or in a storage room making it difficult to identify, analyze and resolve discrepancies efficiently. So how can you combat these challenges?
Through comprehensive reviews.
Combatting Treaty Challenges with Comprehensive Reviews
Comprehensive treaty reviews allow organizations to validate that their reinsurance business is being administered accurately and identify errors that could be causing financial issues. The methodology we developed involves a thorough assessment of reinsurance treaties in a specified block of business. To ensure reinsurance is being administered properly, we check data integrity, compliance and accuracy of premium calculations. If any errors or inconsistencies are found, they can be corrected for accurate processing going forward.
By proactively conducting reinsurance treaty reviews, we have seen first-hand how organizations can achieve the following:
- Identify issues before they become a problem
- Improve risk management
- Identify financial exposure
- Ensure financial predictability
- Improve poor historical processes
Conducting Treaty Reviews are Labour Intensive and Require Niche Expertise
While treaty reviews can provide organizations with a comprehensive understanding of their data and identify red flags, the process requires a lot of manpower and a level of expertise that is limited in our industry. That’s where Artificial Intelligence comes into the picture.
Why We Turned to AI to Simplify Reinsurance Treaty Reviews
After seeing the capabilities of Artificial Intelligence (AI) and Machine Learning, we knew it was the right solution to replicate and scale our current, manual process. Using AI, we can capture treaty data structure unstructured treaty data and turn it into a consumable output that is easy to read, use and understand. This will significantly reduce the labour resources involved in reading and capturing historical treaty data and AI will also make it easier to conduct treaty level data integrity reviews. Finally, this technology provides opportunities to leverage valuable data in ways previously un-imagined.
We are so excited to transform the way our industry interacts with reinsurance treaties and we hope you can join us on this journey.