Aviva Takes 'ri3k' For Jan. 1 Treaties

International Editor

London

Aviva plc has embarked in a relationship with “ri3k,” the London-based technology provider, as a hub to transact its Jan. 1 treaty renewal business.

Craig Patterson, director of group reinsurance operations for Aviva, said his company made the decision to use ri3k because it wanted automated tools to administer the structure of buying treaty reinsurance. Aviva, a London-based life and general insurer, is the result of the mergers of Commercial Union, General Accident and Norwich Union, all U.K. insurers.

Mr. Patterson said his company is using ri3k because it wanted something more than a trading platform that replicates age-old industry processes.

“One of the key issues for us was automating the collection and cleansing of data from various countries around the world into common structures and common currencies,” he said.

Alex Letts, ri3ks chief executive, said the ri3k system enables the entire treaty process from pre-placement, collecting the data, to placement, to administering the contract and moving the data between the parties.

Further, he added, ri3k creates a hub for routing the contract data and the technical accounting data between any of the counterparties in an XML format.

As a data hub, the ri3k system brings the data in, puts it into an ACORD/XML format, and then moves it out to the recipients, Mr. Letts said. Even though the ACORD formats arent by any means universal, ri3k translates the data so that if the recipient has to “tweak” the data, “its a relatively easy tweak,” he added.

“From our end, the real beauty of it is that you can have multiple systems, as long as the data is funneled through the ri3k hub,” said Mr. Patterson, noting that the hub works for companies that have proprietary systems for treaty business as well as companies that dont have proprietary systems.

The ri3k hub provides a transactional administration system for companies without a proprietary system for treaty reinsurance, while it allows companies with a proprietary system to plug that system in to the ri3k hub, which transmits data and information to brokers and reinsurers.

Technologically speaking, the insurance and reinsurance industry is well behind the rest of the financial services sector, according to Mr. Patterson.

Part of the problem, he said, is the requirement of data re-entry every time data needs to be sent from one company to another.

The insurance industry needs to cut out all the duplicated efforts because the industry spends too much time on administration and not enough time in actual strategy for risk management and analysis of exposure and data, he added.

“We want to handle data once, make sure its accurate and be able to analyze it, so we can work with the broker to determine the coverage required, at which point the reinsurer can look at the data to price the exposure,” he said.

In phase one of the ri3k project, Aviva will use ri3k for a number of smaller treaties for risks that require information gathering from a number of different countries for the Jan. 1 renewals, he says.

The ri3k hub provides automatic risk profiles and aggregate profiles in the currencies of the countries where the treaty program is purchased, Mr. Patterson said.

“Were now collecting the data in a structured format, in a document management center, which will then allow us to collate that information and then put it on to the ri3k hub,” he said. “The hub allows us to appoint our broker electronically and for the broker to move that information to the market again electronically in a structured way.”

“The underwriter at the reinsurer can access that information by password,” Mr. Patterson continued. “The underwriter then does a normal analysis on that information and confirms his or her terms and commitment, such as size of line, on an electronic basis.”

Phase one will begin the online signing of risks, which will facilitate phase two of the project when cash and administration will move electronically, he said.

During phase two, Aviva wants to be able to message all of “our risk profile information into internal systems as well as into all stakeholders systems, i.e., brokers and reinsurers,” he said. “This will then achieve an end-to-end process.”

The system should ultimately cut frictional costs by reducing the time it takes to analyze exposure and present the risk to the market, he added.

“If we present all that information to the reinsurer, then we expect that should cut the time it takes the reinsurer to analyze and provide terms on business submitted,” he said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, December 16, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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Aviva Takes 'ri3k' For Jan. 1 Treaties

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