Information Central.Being a layer away from policyholders doesn't absolve ab·solve tr.v. ab·solved, ab·solv·ing, ab·solves 1. To pronounce clear of guilt or blame. 2. To relieve of a requirement or obligation. 3. a. To grant a remission of sin to. reinsurers from needing the newest underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. technology. Today's cutting-edge technology is tomorrow's standard operating procedure standard operating procedure Medtalk A technique, method or therapy performed 'by the book,' using a standard protocol meeting internally or externally defined criteria; a formal, written procedure that describes how specific lab operations are to be performed. . People of all ages are using computers for all kinds of tasks: shopping, communicating and doing business. The North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. e-commerce marketplace grew by 16 million users in 2000. The Online Generation It is axiomatic ax·i·o·mat·ic also ax·i·o·mat·i·cal adj. Of, relating to, or resembling an axiom; self-evident: "It's axiomatic in politics that voters won't throw out a presidential incumbent unless they think his challenger will that the Internet is revolutionizing the way businesses reach their customers and business partners. Over the next 20 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time "online" generation will come of age and hit the milestones generally associated with insurance purchases: first car, first house, first baby. The Internet is integral to everything this generation does, from researching school papers to communicating with friends and seeking entertainment. Some of them even get their allowance by Internet. They have high expectations of 24/7 access to information and distribution channels, customized advice, instant responses and the ability to manage their own accounts online. The insurance industry needs to invest in new technologies now to be ready to serve this generation. Many insurance companies are getting Web-based front-end systems. Back-office systems and business partnerships need to be engineered to support this new way of doing business as well. Reinsurers need to think about how this new distribution channel affects their clients and the underwriting and sales processes A sales process is a systematic approach for performing product or service sales. The reasons for having a sales process include seller and buyer risk management, achieving standardized customer interaction in sales and scalable revenue generation. . They need to be ready to offer appropriate support. Being a layer back from the policyholder is no excuse for ignoring changes in technology and in the marketplace. Everyone in the insurance industry needs to understand and respond to the environment in which its clients operate. High-Tech Underwriting Today, advances in underwriting lie not only in new mortality information or more accurate medical data, but also in technology tools that will make underwriting easier. The industry is moving to systems that speed processing time and reduce costs and let underwriters focus on using their underwriting expertise. Today's technology enables underwriters to focus on underwriting. Document-management systems, document readers and industry-specific online exchanges are all part of these advances. Document-management systems allow files to be viewed, shared and stored electronically. They are becoming more sophisticated and more flexible. They are limited, however, to viewing and sharing documents on the same network. But in the insurance industry, files must frequently be shared with outside business partners. The worst bottleneck A lessening of throughput. It often refers to networks that are overloaded, which is caused by the inability of the hardware and transmission lines to support the traffic. It can also refer to a mismatch inside the computer where slower-speed peripheral buses and devices prevent the CPU in the underwriting process is the journey of a case from the underwriter's desk at the ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. company to the underwriter's desk at the reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. company. Underwriters at both direct-writing companies and reinsurance companies are increasingly looking to online exchanges to distribute and place facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role. fac·ul·ta·tive adj. 1. cases within a state-of-the-art security system. An exchange provides a global solution that improves this costly, labor-intensive process by providing a streamlined approach that saves time and money. What traditionally would take days now can be completed in a matter of minutes A Matter of Minutes is an episode from the television series The New Twilight Zone. Cast
Using an online global exchange, direct-writing companies can post applications and case-specific documents to an extranet site for retrieval and examination by one or more selected reinsurers. Reinsurers receiving the cases examine the applications, underwriting comments and related documents, make an offer decision and then return responses through the same system. Finally, the direct writer will review the responses and select the best offer. Administrative staff is used more productively, and express delivery time and expense are eliminated. Global exchanges operate in all sectors of the industry. Consider, for example, a life insurance application being submitted for facultative reinsurance. An average case includes about 50 pages of documentation and is submitted to four reinsurers. To prepare the case for submission to the reinsurers, a company that has a document-management system would need to download and print the necessary documents and then copy them and prepare mail packages. Preparation takes about 20 minutes; delivery will be 24 to 48 hours later. There is no telling when the application will actually arrive on the underwriters' desks. Using an online system, preparation time is cut to about five minutes from start to finish, and delivery to underwriters at all four reinsurers is immediate. Multiply these figures by the number of cases per week or per year, and the time savings grows. (See "Time Required to Submit a Facultative Reinsurance Case," page 113.) And that doesn't count time spent tracking lost packages and correcting inaccuracies in some collated packages. Time is money. One direct writer that joined a private online exchange found that it could save $100 per case, an average of more than an 85% decrease in costs related to staff, supplies and express mail charges. The insurer also experienced a dramatic decrease in case turnaround time (1) In batch processing, the time it takes to receive finished reports after submission of documents or files for processing. In an online environment, turnaround time is the same as response time. . Fast and Easy Electronic distribution of cases also helps improve the quality and accuracy of the submission. Many documents that may be difficult to read as photocopies of paper documents can be cleaned up and made easy-to-read in an electronic format. New TIFF readers (a file format widely used by document-management systems) allow notes and marks, such as circles or highlights, to be permanently added to files. Thumbnail pictures of each page ease navigation within the file. Shared access to files further speeds the approval process, particularly if multiple approvals or levels of approvals are required. If someone else in the office needs to review the file, the preparer no longer has to gather and organize the file and carry it to the next person's desk. Now the click of a button transports the entire file. The electronic format also encourages and makes easier collaboration in decision making. And in this age of "virtual offices," insurers don't need to pack up their briefcases with cumbersome files. They just log on and the file is there. Not only has delivering and receiving cases never been easier, but integrated tracking systems save time. From submission through acceptance, electronic-submission systems provide continuous, real-time status updates. Insurers now can locate a case and check its status in seconds. Online Exchanges To get into the online underwriting arena, insurers need a new infrastructure. Companies can choose to build their own systems, or they can choose to participate in an online private exchange. An exchange is a shared application infrastructure that allows insurers to conduct business with trading partners and provides application design, development and maintenance. Essentially, the exchange brings together business partners, competitors and third-party information providers in a common, trusted environment. In addition to the significant upfront costs incurred in developing a comprehensive, global system, application service providers pay continuously for physical security, power and multiple backup servers A computer in a network used to store copies of files from client machines or other servers. Such servers typically have their disks set up in a RAID configuration to provide fault tolerance. See backup program, RAID, SAN and LAN free backup. at a secure Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. for optimum online Optimum Online (OOL) is a broadband Internet service provider subsidiary of Cablevision. Optimum Online serves Long Island, other parts of New York, the Bronx, Brooklyn, Westchester, parts of New Jersey, Connecticut, and Pennsylvania. performance. The shared infrastructure means that the individual company does not have the expense of maintaining and operating the system. The application service provider can take advantage of economies of scale in services such as user management, help desk, security assurance, traffic monitoring and capacity changes. Emphasis on Security The online exchange system must be secure and reliable. Regular encrypted en·crypt tr.v. en·crypt·ed, en·crypt·ing, en·crypts 1. To put into code or cipher. 2. Computer Science e-mail will not satisfy current and proposed government regulations. Systems that are dependent on browser encryption The reversible transformation of data from the original (the plaintext) to a difficult-to-interpret format (the ciphertext) as a mechanism for protecting its confidentiality, integrity and sometimes its authenticity. Encryption uses an encryption algorithm and one or more encryption keys. cannot ensure start-to-finish compliance. A more sophisticated level of security is required-one that includes mutual authentication Mutual authentication or two-way authentication refers to two parties authenticating each other suitably. In technology terms, it refers to a client or user authenticating themselves to a server and that server authenticating itself to the user in such a way that both of the site and the user, guarantees start-to-finish transmission encryption of all data, including uploaded scanned documents, and contains network redundancies for performance and reliability. Underwriting expertise is in great demand. The future includes enabling underwriters to underwrite To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue. The word underwrite has two meanings. and stop spending time "Spending Time" is the first single released by Christian artist Stellar Kart. The lyrics describe the band members desire to spend "more time with God". "Sometimes it’s a real struggle to spend time with God. and other resources moving cases to reinsurers or to internal reviewers. Underwriters now can underwrite and leave the rest to technology. The future of underwriting is now. Carol Sullivan is vice president of operations and Paul Buckley is vice president of technology services at AgoraiNS, a secure information and document exchange service and a subsidiary of Munich American Reassurance Go.
Time Required to Submit A Facultative Facultative Reinsurance Case
The Internet ailows underwriters to stop spending time and
resources moving cases so they can focus on underwriting
Weekly Annually
Manual Online Manual Online
5 Cases per Week 2 hours 0.4 hours 12 days 3 days
20 Cases per Week 7 hours 2 hours 46 days 12 days
50 Cases per Week 17 hours 4 hours 116 days 29 days
Source: AgoraINS
|
|
||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion