Dig to a more granular detail in reinsurance to tackle claims leakage

Claims leakage in the global reinsurance market is no small issue.

Claims leakage is the difference between what an insurer actually settles and what it should have paid out on a claim, including reinsurance recoveries. Every year, million of dollars of income is lost through claims that could not be collected via reinsurance and for many, this is due to an inability to get down to the granular level of detail that is needed to assess individual claims.

This implies the need to set up an agile data driven performance management system, which will enable better organized operations internally and externally. In a rapidly changing market, the claims leakage is one of the main concerns for insurers.

To manage yourclaims leakage effectively,you should be careful about:

  1. Event codes

    Coded claims are a major source of claims leakage across the market. If not all claims are correctly coded, accumulated claims simply cannot be collected. And it's not just CAT codes, event coding in general leads to this kind of claims leakage, like in the case of cyber events, where all contracts related to the attack can not be triggered if the event is not correctly coded.
  2. Blocked claims

    Claims leakage is also a particular challenge for block claims. Issues such as not having access to the right level of detail to collect individual claims , or not being able to differentiate between hundreds of claims which are to be passed onto reinsurers, can lead to unrecoverable claims. In addition, some brokers will only process the bottom line on block claim bordereaux, while in any event the data is held in external binders, leading to many ceding reinsurance having issues with granularity and functionality when trying to dig into the details for claims recovery. With a proper reinsurance system, you will be able to select whose profile can have full access and be able to use functionalities to dig into the details for a claims recovery.
  3. Stacked risks

    Stacking risks can also result in claims leakage. For example, writing two risks on the same program and stacking for reinsurance recoveries may be seen as efficient and value adding, but if the claims aren't stacked correctly they are not joined -  making it impossible to recover via reinsurance.
  4. Data-driven reinsurance software

    To avoid those issues leading to the income loss of millions of dollars for one single event alone, snowballing into hundreds of millions across the global market, reinsurance professionals should rely on powerful and intuitive technologies that track all information related to reinsurance policies and can collect, centralize and analyze claims data for use by the insurers, reinsurers and brokers across the chain. Reinsurtech solutions can address exactly these challenges. After all, it's no use carrying an umbrella if your shoes are leaking.

What you need

A cloud based reinsurance software, which handles event codes, blocked claims and stacked risks to avoid claims leakage

Our teams remain at your disposal for a detailed demonstration or any further information on our solutions.