The reinsurance contract is the cornerstone in the creation of a reinsurance program. It defines the terms of the relationship between the cedent and reinsurers. The contract is written, reviewed, modified, and negotiation goes back and forth between the different teams and stakeholders in the program. A poorly defined - or undefined - process can lead to wasted time and even mistakes.
In this article we share 6 reasons why you should use a SaaS platform to manage your reinsurance contracts.
Note: What is a SaaS platform? SaaS (for Software as a Service) is an online software. And therefore: 1) data is simultaneously available to every member of your team; 2) updates are automatic; 3) requires no specific IT integration to use the software!
1. Better collaboration between teams
Reinsurance contracts are created and managed by the legal team. But in addition to the legal team, the underwriting, claims, accounting and the cedent’s teams are all part of the complex life of a reinsurance contract. Information is often siloed between those different parties sharing several communication channels (emails, word documents, phone calls, etc.). The lack of standardization and summary is unproductive and error-prone when it comes to making changes to contracts.
A SaaS platform allows all contract-related information to be consolidated in a single and shared infrastructure. This greatly improves collaboration between teams, with everyone having access to the same and latest information at the same time. Instead of having discussions in emails and changes in Word documents, conversation and feedback can take place next to the related articles in the tool. Furthermore, access right management reduces the risk of error – ending information loss and miscommunication.
2. Less time spent on manual and repetitive tasks
Reinsurance renewals involve a lot of manual and repetitive work, such as:
- New reinsurance contracts renewed each year and then duplicated as many times as there are reinsurers;
- Unifying modified and new clauses in all contracts;
- Sending contracts, as email attachments, to all reinsurers;
- Tracking electronic signatures, which can reach thousands of individual signatures, for a mid-sized reinsurance broker.
The use of a platform which automates and digitalizes offline tasks such as duplicating contracts, sending and following up (with automatic reminders) electronic signatures greatly improves team productivity.
3. Reduce operational risk
Operational risk is everywhere and therefore must be managed – especially human error risks: sending a reinsurance contract to the wrong reinsurer, forgetting to change a clause at the last minute for one of the reinsurers on the panel, etc.
A SaaS platform designed for reinsurance contract negotiations makes it possible to significantly reduce all the components of operational risk and to track and assess the different stages in creating and managing a reinsurance contract.
4. Versioning and tracking changes
The complexity of a reinsurance contract leads to a great deal of discussions between the different stakeholders on the different clauses that make up the contract. These interactions produce new versions and changes in articles, and often lead to a large number of documents shared by email and named "wording_cedant_Motor_23_v16.docx". This makes it quite difficult to track changes and versioning.
A SaaS platform allows you to have a single up-to-date version while being able to track the many changes that were made during the negotiations and to quickly find the discussions that led to the final version.
5. Manage differentiated conditions
In some cases, in reinsurance, there can be some differentiated conditions on a program between reinsurers. Which creates an additional workload in drafting and managing reinsurance contracts for brokers or their legal teams. If a claim occurs, the legal and claims teams have to, once again, read every article of every contract (hundreds of articles to check and compare!) to manually check the existing differences.
A SaaS platform makes it possible to easily manage differentiated conditions with the creation of different variations of the same contract, and to compare at a glance the differences between two contracts of the same program, saving teams a great amount of time.
6. Quickly implement a market-proven solution
Implementing an existing SaaS platform allows you to instantly roll-out a powerful solution, saving resources and money compared to an internal solution.
Once your SaaS platform is set up, you can immediately start building, negotiating, reviewing and generating contracts.
These are 6 reasons why Bifröst has created a SaaS solution for managing reinsurance contracts. Discover it now!