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IT Department Shows Some Support
Insurance carriers run their reinsurance programs through different areas of the company. Some operate in the claims area, others are in finance or accounting, and some are even in underwriting. For Motorists Insurance Group, reinsurance finds its home in the accounting unit.
Motorists had three issues that affected the reinsurance program: budgetary restraints, a lack of IT support, and the capacity restraints in the accounting area to devote resources to the problem, according to Tom Brock, assistant vice president, finance, for Motorists.
Brock is quick to point out that the lack of IT support had nothing to do with the willingness of IT to resolve reinsurance issues, but rather the capability to devote resources to the problem to address the issues as well as other technology issues that already were lined up.
“The lack of a centralized secure platform to administer re contracts and facilitate the process was becoming increasingly problematic,” says Brock. Motorists` system for tracking reinsurance claims with Excel and Access was time-consuming and unproductive. Also, the process didn`t lend itself to providing management the information it needed in a timely fashion.
“We had disparate systems and labor-intensive processes,” says Brock. “To ensure accuracy, we maintained a lot of downstream checks and balancing routines that were inefficient. We needed to improve our system.”
To address the problems, Motorists began with an assessment of the company`s internal environment to determine what was being done and what could be done better. To do that correctly, the carrier enlisted the help of a consultant to begin the search for a new reinsurance platform.
The consultant gave Motorists a list of vendors they felt could satisfy the carrier`s needs, but Motorists wasn't overly impressed with what was out there, according to Brock.
One vendor that was not on the initial list was Effisoft.
“The level of technical knowledge at Effisoft was conveyed and we were impressed with how receptive they were to our needs,” says Brock. “They assured us they could customize our requirements.”
Many of the large vendors focused on the assumed perspective of reinsurance, but Motorists looked to improve the administration of its ceded operations and found Effisoft to be more familiar with its needs. “They conveyed confidence with every hurdle we presented,” says Brock.
Motorists launched an RFP-based search in 2011 and identified the appropriate solution in early 2012. Other priorities delayed things, according to Brock, but Motorists maintained an open line of communication with Effisoft throughout 2012 and the contracts were executed in the first quarter of 2013. Motorists launched the implementation of Effisoft`s WebXL product shortly thereafter.
The implementation stretched longer than the carrier anticipated, partially due to shifting priorities on Motorists` end and a mutual underestimation of the time it would take to customize the solution to Motorists` needs. The implementation was completed in the second quarter of 2014.
Will Thorsberg, property/casualty accounting manager, managed the development project and was the key contact for Effisoft. “Effisoft`s effort went far beyond the usual,” he says. “Their team overcame every obstacle and was always responsive and available.”
Four members of Motorists` accounting team devoted 50 to 75 percent of their time to this endeavor and select members of the company`s claims and IT units helped support the project.
“The solution has lived up to our expectations,” says Brock. “We haven't finished enhancing our workflows to fully leverage the opportunities introduced to our environment, but additional enhancement efforts are ongoing.”
Senior management now has a greater comfort level with the reinsurance process. “They`ve definitely taken note of the enhanced controls and increased efficiency,” Brock says.
WebXL`s capabilities also help Motorists work more effectively with outside parties—rating agencies, reinsurers, brokers, external auditors, and state examiners—who appreciate the secure and transparent nature of this system, according to Brock..
The solution enabled Motorists to establish a more sophisticated framework that provides the organization with increased access to data, increased control, and a superior means of processing and reporting information.
“It also helped us modestly enhance our bottom line as a result of gains in efficiency,” says Brock. “The investment has already paid for itself and we see some positive cash flow, but it was really the other factors that drove us.”
Motorists has an ambitious vision for 2021, according to Brock, and it calls for aggressive growth. The carrier believes the reinsurance implementation has positioned the company for that growth and will enable them to process a greater volume of transactions and handle more complex reinsurance arrangements without sacrificing productivity.
“It's also improved our risk management capabilities and enabled us to meet the increasingly stringent expectations of our regulatory bodies,” points out Brock. “It's well aligned with our vision for the future.”