Hurricane Preparedness Week (May 15-21) has flown by. It’s a good time—especially for coastal residents—to think about how to prepare for a land-falling tropical storm or hurricane. For insurance carriers, the week is also a good time to prepare for and evaluate their exposure, since the majority of reinsurance catastrophe covers are up for renewal July 1. Now is the time to plan.
The 2016 Atlantic hurricane season runs from June 1 to November 30 and includes the North Atlantic Ocean, Gulf of Mexico and Caribbean Sea. Expectations are that this will be the most active season since 2012, according to a forecast from The Weather Company. The forecast includes:
- 14 named storms
- Eight hurricanes
- Three major hurricanes (Category 3 or stronger on the Saffir-Simpson Hurricane Wind Scale)
Clearly, these numbers top the 30-year historical average of 12 named storms, six hurricanes and three major hurricanes for the Atlantic basin.
A ceding company needs to proficiently manage these risks/exposures for potential reinsurance recovery to get the maximum recovery dollars. Therefore, carriers need to be asking themselves if they are ready for the onslaught of hundreds—even thousands—of claims transactions that may be eligible for potential reinsurance recovery. Is their reinsurance process/system able to quickly and accurately calculate and process the maximum recovery from every treaty contract and facultative certificate?
Can the company quickly and accurately:
- Bill reinsurers?
- Track payments and receivables?
- Report and analyze reinsurance activities?
- Process and report Schedule F?
- Track Schedule F requirements and collateral throughout the year?
The solution is for companies to automate the reinsurance process. Automation of the reinsurance process and Schedule F administration will allow companies to process a much greater volume of work, at a much greater speed, with a much higher degree of accuracy. This translates into increased levels of productivity, dramatic reduction in overhead expenses, and most importantly maximum reinsurance recovery from every treaty contract and facultative certificate.