 Craig Robinson Reinsurance Sales Engineer StoneRiver |
 Don Goodenow Director, Product Management, Reinsurance & Collections Stone |
We know insurance is risky business, and it’s only going to get riskier.
AccuWeather forecasts a more active hurricane season for the U.S. compared to last year. More tornadoes are predicted for many areas of the U.S. We’ve seen what earthquakes and tsunamis can do. Preparing for these weather-related changes is challenging every area of the insurance industry, and the industry is responding.
Reinsurers have responded by beginning to raise rates, after many years of a soft market. Weather models and underwriting processes are being reviewed.
Primary companies are reviewing their cat team preparations. Claim systems are being evaluated for their ability to handle the losses. Training is being updated.
At the same time, many companies are responding to changes in insurance regulations and a heightened focus on capital adequacy. This will no doubt lead to tighter controls and increased audit scrutiny. The risks of failure in these areas must be avoided.
Every risk-related element of the industry is receiving attention. Or is an important element being overlooked? Is a risk being created that need not exist?
After the crisis has passed, when the claims have been handled and primary companies turn to their reinsurers, will your cession processing be up to the task? Will you be prepared to account for and manage what may well be your largest asset – your reinsurance recoverables? Missed recoverables mean higher net loss ratios, capital strain, and may ultimately impact a company’s competitive position.
Many companies are managing their recoverables using extensive spreadsheets. They believe they have everything accounted for. They think they’re ready. They are sure of it.
Unfortunately we know this is not the case. Too many times we have seen a company discover millions in overlooked recoverables once they install a reinsurance processing system. These companies were sure they had everything accounted for, but they were wrong.
Are you creating a storm that can be avoided?