Cedent Loss Bordereau - Acord

Cedent Loss BordereauJohn DiBuduoPartner Re**This presentation is for general information, education and discussion purposes only, in connection with the ACORD ImplementationForum. Any views or opinions expressed, whether oral or in writing are those of the speaker alone. They do not constitute legal orprofessional advice; and do not necessarily reflect, in whole or in part, any corporate position, opinion or view of Partner ReinsuranceCompany of the U.S., or its affiliates, or a corporate endorsement, position or preference with respect to any issue or area covered inthe presentation.

Agenda• History of Bordereau Message• Objectives Of Bordereau Working Group• History And Status of The BordereauSpreadsheet Implementation Project• Understanding the scope of the RLCBordereau Standard• The Bordereau Spreadsheet Implementation• Implementation Challenges• Next StepsEfficiency in Reinsurance Operations1 May 2012

History of Bordereau Message• Started as a JV EDI message in 1999• XML version was completed in 2000 – noadoption• Standard remained but unusedEfficiency in Reinsurance Operations1 May 2012

2009 Focus Group• Decided to revive the use of the bordereaumessage• Spreadsheet format rather then an XMLmessageEfficiency in Reinsurance Operations1 May 2012

Cedants Needs• Avoid paper handling and copy cost• Avoid mail cost for large bordereaus• Avoid complaints from unreadabledocumentsEfficiency in Reinsurance Operations1 May 2012

Industry Interest inImplementation• Bordereau is a needed backup foraccounts statements from cedants• Faster handling of bordereau by all partieswould help validate and process cedantaccounts faster• Opportunity for reinsurer to processinformation in greater detail for actuarialand accident year reportingEfficiency in Reinsurance Operations1 May 2012

Objectives Of BordereauWorking Group• Viability of a spreadsheet-based approach• Use of existing ACORD standard• Implementation guidance to the RLCcommunityEfficiency in Reinsurance Operations1 May 2012

Value Of Spreadsheet BasedACORD Messaging• Initiatives are underway in the exposuregroup and Europe’s Rushlikon movement touse spreadsheets– Rushlikon “Light” has chosen Web Connectivity toact as a spreadsheet “hub” between cedants,brokers and reinsurers– Idea is to give cedants a low cost entry point– Use of ACORD based spreadsheets may be entrypoint for any low volume information transfer– Principles of cedant bordereau can be broadlyappliedEfficiency in Reinsurance Operations1 May 2012

Status Report• Working Group Formed in September, 2009• Focus on a loss bordereau• Decision: spreadsheet approach was morelikely to gain adoption then XML messaging• Project plan developed– Prototype spreadsheet – Fall 2010– Initial implementers – The Travelers Insurance,Guy Carpenter, Partner ReinsuranceEfficiency in Reinsurance Operations1 May 2012

Spreadsheet Iterations• Use a treaty of significant size currentlyexchanged between the chairingcompanies• 1Q & 2Q 2010 Accounts used for testing• Standard and suggested template set in2010Efficiency in Reinsurance Operations1 May 2012

Production Status• Travelers has moved into implementationmode in 2011– Travelers is live with a significant program withone broker and three direct writers. In turn, thebroker is dealing with several reinsurers includingPartner Re– Partner Re has saved over 20 man days inprocessing time by just this one account comingin via spreadsheets– Travelers is preparing communication plan toother business partners and is looking for otherprograms to implementEfficiency in Reinsurance Operations1 May 2012

Production Status• ACORD is planning cedant visits topromote adoption of cedant spreadsheetbordereau– Planning is in the works for an event in theHartford area for early 2012Efficiency in Reinsurance Operations1 May 2012

Scope: Messages• Two ACORD messages could be used forreporting losses on a bordereau basis– Claims Notify Message – PCS• Being used now by some full service MGA's tocommunicate losses to the insurance companies• Premiums are also being report via theCommercial Package Policy Information Entity– Bordereau Message – RLCEfficiency in Reinsurance Operations1 May 2012

Scope: Standard• Decision was to use the RLC standard– PCS used for primary transaction & bordereaureporting– RLC used to send the information to brokers andreinsurers after a cedant has processed their datathrough their ceded reinsurance system and/orprocess– If people wanted to use a PCS standard to sendspreadsheet based information, they can followthe same process followed by this working groupto develop an approachEfficiency in Reinsurance Operations1 May 2012

Implementation• General Topics• Header Section• Per Claim InformationEfficiency in Reinsurance Operations1 May 2012

RLC Starting Point• Start with RLC• Column– XML Bordereau Message - version 2009.1• Use tags from other RLC messagingwhere needed• Other tags being addedEfficiency in Reinsurance Operations1 May 2012

Recommendations• Microsoft Office Excel• Office 2000 or higher version• For multi layer programs:– One file per layer– One sheet/tab within the spreadsheet• Data as a CSV fileEfficiency in Reinsurance Operations1 May 2012

Required Versus Optional Fields• Optional and required field suggestions• Column names Correspond to RLCstandards• Recommendations for ACORD tables tobe translatedEfficiency in Reinsurance Operations1 May 2012

Cedants May Have to AddFields• Members can contact ACORD forassistance• Non members should consult with acompany who does have access toACORD• Add your own column headings but makesure the definition and format are wellunderstood by your businessEfficiency in Reinsurance Operations1 May 2012

Header Section• Header Information are the fields thatwould be common to the entire bordereauand not each specific loss• Two approaches to sending headerinformation– Send header once at the top of thespreadsheet (recommended approach)– Send header data repeated for each row ofthe spreadsheetEfficiency in Reinsurance Operations1 May 2012

Header ExampleEfficiency in Reinsurance Operations1 May 2012

Header Data - RepeatedEfficiency in Reinsurance Operations1 May 2012

Header Fields• Contract Name (Required)• Bordereau Section Description(Required)• Bordereau Basis (Required new tag totell receiver of border representschanged information only or ITD)• Underwriting Year (Required)• Bordereau As Of Date (Optional)• Bordereau Period Start Date(Required)• Bordereau Period End Date (Required)• Cedent Name (Required)• Cedent Identification (Duns Number)(Optional)• Cedent Contract Reference (Required)• Receiver (Optional)• Receiver Duns Number (Optional)• Contract Period Start Date (Required)• Contract Period End Date (Required)• Broker Contract Reference (Optional)• Reinsurer Contract Reference(Optional)• Bordereau Currency (Required - Note:could be required at the Per Claimlevel as part of the Dollar Amounts)Efficiency in Reinsurance Operations1 May 2012

Per Claim Information• Policy Information• Claim Description• Dollar AmountsEfficiency in Reinsurance Operations1 May 2012

Policy Information Fields• Treaty or Facultative Indicator(Optional)• Contract Nature (Optional -Proportional/non-Proportional• Original Policy Holder Name (Required)• Cedent Original Policy Reference(Required)• Original Policy Period Start Date(Required)• Original Policy Period End Date(Optional)• JV Class Of Business RecommendACORD table Translation Preferred• Trading Partner Class Of Business(Optional /In Lieu Of JV Class - Maybe policy information or ClaimDescription)Efficiency in Reinsurance Operations1 May 2012

Claim Description Fields• JV Class Of Business RecommendACORD table Translation Preferred• Trading Partner Class Of Business(Optional /In Lieu Of JV Class -May be policy information or ClaimDescription)• Claimant Name (Optional)• Cedent Claim Reference(Required)• Loss Date (Required)• Loss Date Basis (Optional)• ISO Cat Reference (Optional)• PCS Reference (Optional)• Loss Status (Optional)• Claim Closed or reopenedIndicator (Optional)• Loss Description (Optional)• Cause of Loss (Optional(Recommend Translation toACORD table Cause Of Loss)Efficiency in Reinsurance Operations1 May 2012

Dollar Amount Fields• Currency (Required unlessprovided in the bordereauheader)• Outstanding Loss ForContract After Retention(Required)• Outstanding Expense ForContract After Retention(Required)• Current Payment Losses ForThe Contract (Required)• Current Payment ExpensesFor The Contract (Required)• The next four fields should beprovided if Current PaymentFields are omitted)• Total Losses Paid For ContractAfter Retention (Optional)• Total Expense Paid For TheContract After Retention(Optional)• Previously Billed Loss For TheContract (Optional)• Previously Billed Expense For TheContract (Optional)Efficiency in Reinsurance Operations1 May 2012

Implementation Challenges• Adoption– How fully automated are cedants currentprocesses for producing a bordereau?– How many places will they have to make thechanges?– What other documents need to be sent withcedant bordereau?– How long will it take to get all participants on aprogram to parallel and accept the newformat?Efficiency in Reinsurance Operations1 May 2012

Implementation Challenges• Communication– Cedants communicating to broker or reinsurernew spreadsheet structure and logistics forhandling it• Travelers is in this process now– Brokers communicating to reinsurers newspreadsheet structures and what to expect foreach programEfficiency in Reinsurance Operations1 May 2012

Implementation Challenges• Implementation– Brokers adding their reference informationand reference information of reinsurer– Having to manipulate the data once thespreadsheet is generatedEfficiency in Reinsurance Operations1 May 2012

Next Steps• Organize changes and additions to thestandard for the next MR cycle.– Pilot fast track additions for undefined dataelements• Publish implementation guide• Partner Re is looking at automating thespreadsheet into its account processingsystem• Talking with other cedants aboutimplementationEfficiency in Reinsurance Operations1 May 2012

Next Steps• Identify and assist early adopters amongstcedents, brokers and reinsures• Get a premium bordereau started• How will we go from spreadsheets to XMLEfficiency in Reinsurance Operations1 May 2012

Open DiscussionEfficiency in Reinsurance Operations1 May 2012

Efficiency in Reinsurance Operations22 September 1 May 20112012

Two Blue Hill Plaza3 rd FloorPearl River, NY 10965USA+1 845 620 1700London Underwriting CentreSuite 1/33 Minster CourtMincing LaneLondon EC3R 7DDUnited Kingdom+44 (0)20 7617 6400Efficiency in Reinsurance Operations22 September 1 May 20112012