The operational relationship between life insurers and reinsurers is mired in complexity, but best practices implemented by both parties could allow reinsurers to add greater value to the industry.
Boston, November 22, 2010 – A new report from Aite Group examines the key difficulties that life insurers and reinsurers face in working together. Based on July to November 2010 Aite Group interviews with 25 key executives at North American life insurers, reinsurers, service providers, and technology firms servicing the market, it discusses areas in which insurers and reinsurers might better work together within the context of strategic life reinsurance business drivers. The report also analyzes specific operational issues, and profiles specific vendors available to alleviate these issues.
Reinsurers—insurers of insurers—play an important role within the life insurance ecosystem, essentially covering a portion of the risk that insurance firms take on. Despite this, the relationship between insurers and reinsurers is often complex—many of the core difficulties derive from the low degree of automation in place at life insurers as well as from insurers’ continued use of siloed mainframe platforms to provide various products. A lack of broadly implemented standards for common data feeds and processes further impedes effective data exchange and process improvements between the two parties. Fortunately, a number of vendors help insurers and reinsurers aggregate and process the disparate streams of data with which each must regularly perform for reinsurance reporting and billing.
“As the U.S. estate tax impasse resolves one way or another in 2011, a strong year for life insurance products oriented toward estate planning may be in the offing,” says Clark Troy, senior analyst with Aite Group and author of this report. “This should drive increased volume in life reinsurance, and may provide impetus for process improvements in the segment.”
The report profiles the following vendors: Logiq3, msg systems, Quasar Systems, Rivers Wave Consulting, and Tindall Associates Inc. (TAI).
This 31-page Impact Report contains 11 figures and one table. Clients of Aite Group's Life Insurance service can download the report.