Better Communication is Key for the Reinsurer-Insurer Relationship
An inability to communicate effectively can obviously harm relationships. Renowned author and psychology professor, Dr. John Gottman, cites “stonewalling” as a major predictor of divorce among married couples.
Being unresponsive can also harm businesses, including insurers. Providers want to work with partners, such as reinsurers, that have a proven reputation for communicating quickly, honestly and effectively. And reinsurers desire the same from carriers. It’s essential in today’s connected, social media age to be able to provide accurate information immediately.
New reinsurance market representation, with substantial investments from alternative capital, magnifies the fact that insurers want and even need to work with reinsurance companies that are responsive, agile and customer-centric. But insurers also know that they must be able to communicate in a reciprocal fashion with the reinsurer to make the relationship work.
Now that we’ve identified an important problem, how can we solve it? Investing in a modern, ceded reinsurance system will dramatically improve communication on both sides of the insurer-reinsurer relationship, as well as with customers:
- The system will automatically attach policy and claims to reinsurance contracts, creating all the cession, bills and regulatory reporting necessary. Reinsurers appreciate faster response times to their requests for more information when claims are billed, just as timely payments for premiums help establish insurers’ credibility.
- The billing component of the system will automatically and seamlessly support multiple currencies and legal entities to ensure that operations can support all sources of financial data processed by your business.
- Your system will have the ability to fully and automatically analyze your risk exposures and KPIs across books of business, even as claims are processed and exposures change. This information can be shared with your reinsurers during contract negotiations. Your reputation for better record keeping and information sharing should help you improve the rates you negotiate.
- More renewed contracts will result, because reinsurers know you are easy to work with, competent and responsive.
Carriers who take advantage of the opportunity to invest in a robust, ceded reinsurance system will become more agile in their operations, reduce long-term operating costs, and gain the benefits of quickly and accurately responding to reinsurers and market needs, improving client communications. Reinsurers respect a company that maintains detailed and reliable information, making them easier to work with. Implementing a ceded reinsurance system will help all sides communicate better, hopefully leading to many happy unions.