Automates calculations and generates transactions for premiums, commissions and claims based on events and transactions at the original policy level throughout the entire reinsurance contract workflow, from assumed and ceded to retroceded business

Overview

Once the contracts have been set up within the Contract Management Server, the system can accept transactions reported via any interface to the system (either through the API, a direct business reporting module, or via the indirect transaction entry screens in the Contract Management Server). The Technical Accounting Management Server then performs the necessary calculations and generates the appropriate technical accounting transactions. These transactions are propagated throughout the reinsurance contract model by generating the appropriate transactions for each assumed ceding contract, book-of-business treaty, and retrocession contract. The system generates the transactions and technical accounts (documents) for each participant based on their participation at each stage of the model.

The system allows a single original transaction to be applied to multiple assumed ceding contracts, e.g. a single original premium transaction may be applicable to a facultative quota share, quota share treaty, and an excess of loss treaty. In the same manner, a single book-of-business contract may be mapped to multiple retrocession contracts (and vice versa).

If the Technical Accounting Management Server encounters a pending reinsurance contract in the chain of contracts, it will move the transaction to a holding queue and then notify persons responsible for Contract Management via e-mail about the pending contract and the transaction affected. All transactions placed in the holding queue are processed again in a given timeframe, e.g. 48 hours.

The transaction engine also notifies the designated users via e-mail should any errors or business rule violations occur, such as incompatible multiple contracts being applied to the same transaction (e.g. both risk excess and surplus in one case; or the existence of an assumed ceding contract which has not been mapped to a retention or book-of-business treaty). Where it finds a serious error that will impact results, the system stops processing until the problem is corrected.

For each transaction in the assumed ceding contract, a reverse entry is generated for the retention or book-of-business treaty. The entries into the retention or book-of-business treaty trigger an evaluation of the retrocession contracts based on the transaction type. For each transaction generated for any retrocession contracts, a reverse entry is generated for the retention or book-of-business treaty.

A basic illustration of the flow of transactions can be found below.