Corporate Covers are a strategic, cost-effective mechanism for providing appropriate reinsurance cover where there are multiple Operating Units in an organisation, each sharing the reinsurance costs rather than purchasing its own programme.
More reinsurance programmes are being placed covering both the parent and a multiple of their subsidiaries instead of individual programmes. This strategy also enables the Group to aggregate smaller losses from individual entities that may otherwise not be recoverable.
How effectively are you managing your Covers?
From an outwards reinsurance standpoint, it is vital that your system(s) can administer every combination of these contracts. Being able to process and analyse at Group and Operating Unit level(s) is the hallmark of a true multi-entity solution. The acid test is complete overall control with strict user-definable segregation of data sitting above the usual segregation of functionality and authority limits.
Additionally, you should factor in the need to be able to configure the importing of data on an entity by entity basis. Such importing functionality and capability will also need to meet the mapping needs of each Operating Unit given the potential for different mapping structures and requirements.
Other challenges that your processes need to address
- Claims leakage: When trying to aggregate losses from multiple sources, it may be difficult to have any common coding that enables the organisation to identify common Catastrophes across their business correctly. If losses from different sources are not correctly identified to produce the correct accumulation, your organisation will suffer from unnecessary claim leakage.
- Premium Adjustments: Premium costs will need to be charged to each entity, however, there are many different ways that an organisation will look at apportioning their premium costs. If the contract has already been exhausted by one or two entities, should each of them contribute to the cost of the reinsurance.
- Claims apportionment: Claim recoveries also need to be apportioned and again there can be disadvantages if an organisation only looks at the losses that are recovered it may disadvantage an entity if their loss only eroded the aggregate.
Cenata Sure from Cenata uniquely addresses these vital issues.
Corporate Covers is one of the many areas where Cenata SURE from Cenata is uniquely able to meet your outwards reinsurance needs.