I've seen companies go in two directions in this. One was a classic
"out-of-control" project which was developed in-house and, in the planning
stages, was going to be everything to everybody. Several million dollars
(and WAY too many dead trees) later, it had to be scaled back. The other
was a purchased system, which needed so much alteration it probably would
have been cheaper to develop in-house. (And, in 1978, there was the
in-house system which gave the expiration date for renewable treaties as
12/31/99, but let's not start a thread on THAT.) Lessons learned:
1. Find out if the system can handle foreign currency. You may need it
for reinsurance transactions. Find out how many decimal places it handles
and what happens when a country develops a new currency. A former employer
had to develop a "new" Argentinian currency code which was 1000 times the
old one when the value of the Peso dropped so far that the value was zero
on our system. Unfortunately, the Agentinian giovernment then created a
new currency- 10,000 times the old one. It was suggested that the company
version be called the "Evita".
2. Check into ceded reinsurance. Your company probably buys reinsurance
protection to cover its book and it should be reflected, to the extent
possible, in the system. I say "to the extent possible" because some
reinsurance covering multiple lines has to be allocated judgmentally.
3. Check for the ability to aggregate claims covered by a single
retention- both assumed and ceded reinsurance.
4. Make sure that data by accident year is available at any point- not
just a "snapshot" of everything put through at the request date. (I saw a
system created by a respected company which worked that way. If you didn't
request results for a particular split of the data at date x, it was gone.)
Also- find out if the data is "frozen". If someone corrects the accident
year on a transaction put through in the last accounting quarter, can you
produce a corrected triangle as of the last quarter, or is it forever stuck
in the quarter the correction was booked? The ideal system can porduce
triangles either way.
5. I'd be stunned if there really were a single system which could
properly handle accounting, statistical reporting, claims, investments and
assumed and ceded reinsurance- but then, I've been stunned before. Some
systems do some things better than others.
Good luck.
Regina Berens
Scruggs Consulting
http://www.scruggs.com
----------
> From: Dnpowell71@aol.com
> To: casnet@lists.casact.org
> Subject: Primary & Reinsurance computer Systems
> Date: Monday, January 18, 1999 11:33 PM
>
> Hello,
> My company (which shall remain nameless!) is contemplating the purchase
of a
> new computer system. We sell a lot of primary (ISO lines & WC), but also
> excess and reinsurance-like products too. And actual reinsurance too, I
> think. It's not a Y2K thing, we just need a better system for extracting
> *usable* data for stat reporting, compliance, and internal reporting. We
are
> looking for an "off the shelf" system.
> Hmmm, not much of a question yet. Is anyone aware of a System that can
handle
> all the different contracts (primary, excess, reinsurance) and lines
(ISO
> lines, WC, even some A& H)? Some of the excess & reinsurance-like
> contracts/arrangements can get pretty complicated!
> It seems to me we need two separate systems and then we drop some
databases
> into oracle or access and query that. We can rely on a few system
reports to
> provide numbers to tie back to. Or some third party program can link the
two
> and produce combined electronic and printed reports.
> Some people are really pushing for a combined system that does it all,
> registration, accounting, issuance, compliance reports, stat reporting
etc.
> Even if some of the business has to be shoehorned in.
> Please share your experiences selecting and installing a new system, and
also
> and tips or lessons learned. Actual recommendations are welcome too.
> Wish us luck too, because this is going to be like heart surgery, and
nobody
> has their finger on the pulse of an insurance company like the actuaries
do!
>
>
>
>
> Visit the CAS Web Site at http://www.casact.org
> ===============================================
> To subscribe or unsubscribe from CASNET:
> Send an e-mail to caslists@lists.casact.org
> Type in the body join casnet to subscribe
> or leave casnet to unsubscribe.
Visit the CAS Web Site at http://www.casact.org
===============================================
To subscribe or unsubscribe from CASNET:
Send an e-mail to caslists@lists.casact.org
Type in the body join casnet to subscribe
or leave casnet to unsubscribe.