Large financial firms partnering with Business Process Outsourcing providers has been a noticeable trend in recent years. Some of these partnerships involved the movement of (North American) domestic jobs offshore to countries like India as a cost-cutting measure. Others involved what is often described as “knowledge process outsourcing” of niche business functions to specialized vendors to extend the expertise of their current team.
When (then) parent company, Goldman Sachs, announced the offshoring of some of their own functionalities, Commonwealth Annuity (now part of Global Atlantic Financial Group) decided to conduct an internal review of reinsurance business processes to identify opportunities to optimize their own strategy. It included both legacy blocks and newly acquired blocks, that were part of their growth strategy.
After completing their internal review, Global Atlantic identified the need to:
- Gain control and transparency of ceded business
- Minimize financial and operational risk
- Develop and execute strategic growth initiatives
- Have adequate resources on hand to manage scaling business
Achieving all of this would result in a streamlined approach to reinsurance administration. Here is how they did it.
When you acquire a block of business – you also acquire any errors in administration that have been made within that block up until the point that you acquired it. Given Global Atlantic’s newly acquired blocks were being handled by multiple third-party administration, their first priority was to gain control and transparency over this ceded business.
They decided that consolidating their reinsurance administration to one provider would be the first step in gaining control of their ceded business as it would all be ‘under one roof’. It was also important that that the provider gave Global Atlantic full transparency of the business being administered.
LOGiQ3‘s collaborative approach to reinsurance administration helped Global Atlantic gain control and transparency of their ceded business. Having a provider that operates as an extension of Global Atlantic has ensured that transparency and control have remained at the forefront of operations ever since.
Minimize financial and operational risk
After implementing the new operational model (one provider managing reinsurance administration), Global Atlantic gained a consistent approach to administration.
Consistency combined with LOGiQ3’s proactive administration approach allows for errors in reinsurance data to be more readily identifiable before they become a problem. Resulting in minimized financial and operational risk.
“By consolidating our reinsurance administration with one provider, we wereable to gain a consistent approach across all of our reinsurance counterparties,a better view of our aggregate risk and specialized administration expertise,”
- Joel Volcy, Managing Director of Operations for Global Atlantic.
Develop and execute strategic growth initiatives
With a new operational model including a trusted partner and consistent approach to reinsurance administration, Global Atlantic could focus on developing and executing strategic growth initiatives. Which paid off.
Over the following years, Global Atlantic increased their reinsurance portfolio and cessions under management by 771% in 2009 and again by 634% in 2014. As they focused on bringing in new business, Global Atlantic didn’t have to worry about having the proper resources or processes in place to manage it. Which leads to the final item on their solution checklist….
Have adequate resources on hand to manage scaling business
When major growth occurs in businesses, it can be a race (and sometimes challenge) to find immediate resources to manage it. LOGiQ3’s ability to manage scaling business volumes allowed Global Atlantic to experience smooth sailing during their peak growth periods. Plus with specialized expertise in-house at LOGiQ3, Global Atlantic could ensure their reinsurance was being administered by individuals equipped to expertly handle this function of business.
Continued success with streamlined approach to reinsurance administration
By consolidating their reinsurance administration to one provider, Global Atlantic gained a proactive, strategic approach to reinsurance administration. They continue to benefit from this streamlined approach to reinsurance administration as it gives them
- Control and transparency of ceded business
- Ability to minimize financial and operational risk
- Freedom to focus on core competencies and strategic growth initiatives
- Access to adequate resources and expertise to manage scaling business