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

As the Baby Boomer generation retires, this challenge seems likely to continue until insurers recruit, groom or train replacements. Lack of reinsurance automation and accuracy of spreadsheet formulas tied for second place as vital issues.

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

One-third of the responding companies have reinsurance automation, nearly double the number reported last year. The highest use of automation occurred at companies with $100 million to $500 million in direct written premium. However, even with greater use of automation reported, 60 percent still rely on spreadsheets and seven percent use manual methods, according to the survey.

While the majority still lacks automation, only one-quarter replied that their company does an average or less than average job of managing their reinsurance recoverables. That might be due, in part, to the fact that 57 percent receive recoveries in less than two months, points out StoneRiver.

“The survey also indicates that carriers could benefit from automation 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 37 percent rated their company above average in how well current processes allow automation of these events.”

The number of participants using multiple currencies increased from 31 percent last year to 45 percent this year. Eight percent felt multiple currencies would be important for their companies in one to three years; five percent in three to five years.

An overview of survey results is available at www.stoneriver.com.

Special Reports /

Personnel Hottest Reinsurance Issue for P&C Carriers: StoneRiver Survey

Related Stories

Recommended For You