The most critical issue facing the reinsurance department atproperty and casualty carriers revolves around personnel whounderstand reinsurance either retiring or leaving the company,according to recent research from StoneRiver.

As the Baby Boomer generation retires, this challenge seemslikely to continue until insurers recruit, groom or trainreplacements. Lack of reinsurance automation and accuracy ofspreadsheet formulas tied for second place as vital issues.

The fourth annual StoneRiver Reinsurance Administration Surveyuncovered these concerns as well as other trends, interests andstrategic direction of the industry. In April more than 40participants responded from a cross section of primarily U.S.property and casualty carriers.

One-third of the responding companies have reinsuranceautomation, nearly double the number reported last year. Thehighest use of automation occurred at companies with $100 millionto $500 million in direct written premium. However, even withgreater use of automation reported, 60 percent still rely onspreadsheets and seven percent use manual methods, according to thesurvey.

While the majority still lacks automation, only one-quarterreplied that their company does an average or less than average jobof managing their reinsurance recoverables. That might be due, inpart, to the fact that 57 percent receive recoveries in less thantwo months, points out StoneRiver.

“The survey also indicates that carriers could benefit fromautomation of property catastrophe events,” says Sue Peirce,assistant vice president of reinsurance operations at StoneRiver.“In a year that has seen some significant catastrophes, only 37percent rated their company above average in how well currentprocesses allow automation of these events.”

The number of participants using multiple currencies increasedfrom 31 percent last year to 45 percent this year. Eight percentfelt multiple currencies would be important for their companies inone to three years; five percent in three to five years.

An overview of survey results is available atwww.stoneriver.com.