AVP - Reinsurance Operations
Anyone who has been in the insurance industry for 10 years or more probably remembers some processes that were more manual and time-consuming in their early days. David Morales of our Reinsurance staff is no exception.
In his new thought leadership article called Unraveling Schedule F and Reinsurance Processing, David recalls how year-end duties many years ago generally began with requesting a stockpile of reports from the IT department. A few days later, reams of perforated computer paper would arrive on his desk. Reconciliations of reports to reinsurance ledgers required manually tallying up numbers from various large green ledger books. He had to attach the long strands of adding machine tape to reinsurance recoverable statements as backup support, indicating that all was in balance.
Once year-end numbers were finalized, they would begin the Annual Statement preparation. That too was a significant effort involving manual processes. But Schedule F was his nemesis. With each passing year, it grew in complexity and in the quantity of reinsurance data required.
Maybe that’s why David is such a proponent of automating reinsurance administration today. He has experienced the downside of no automation. Plus, he understands that today carriers must be able to produce a defensible audit trail for Schedule F transactions and for their reinsurer’s information, or they risk additional Schedule F penalties and may even be required to refile their financial statements. This would be a very costly outcome in terms of expense and reputation.
David speaks candidly about automation, so check out his article. And then let us hear from you. What’s your favorite story about past manual processes?