[0002] A portion of the disclosure of this patent document contains material that is
subject to copyright protection. The copyright owner has no objection to the facsimile
reproduction by anyone of the patent document or the patent disclosure, as it appears
in the Patent and Trademark Office patent file or records, but otherwise reserves all
copyright rights whatsoever.
BACKGROUND
Field of the Invention
[0003] The present invention relates generally to the insurance and reinsurance
industries, and more particularly, to a system and method for managing the creation
and placement of reinsurance. The present invention provides reinsurance creation
and placement tools for direct insurers (cedents), which can be used as a stand-alone
tool or in conjunction with tools from reinsurers.
Background of the Invention
[0004] Reinsurance is the insurance of insurance companies' risks. More precisely,
reinsurance is the transfer of part of the hazards or risks that a direct insurer assumes
by way of insurance contract or legal provision on behalf of an insured, to a second
insurance carrier, the reinsurer, who has no direct contractual relationship with the
insured.
[0005] To set premium rates, insurers must be able to predict future losses. However,
it is impossible to predict the exact moment fate will strike any one individual, or the extent of the loss that this blow will cause. Thus, insurers consider large groups of their clients under the assumption that each is exposed to the same types of risk, and that each loss is a separate event. In such cases, the larger the group, the closer the average loss will approach a definite value. This is the result described by the law of large numbers, discovered by Jakob Bernoulli around 1700. Thanks to this law, an insurer can predict the total annual loss to be expected for the group much more accurately than for any one individual. The projected losses are then distributed among those insured, thereby determining the premium.
[0006] Today, insurers make extensive use of statistics to calculate the expected
losses and distribute them over the individual premiums. Statistics are always based
on the past, but the laws of probability make it possible to apply these data to the
present and to predict future trends. Though the theory of probability is highly
developed, there is a risk that there may be differences between prediction and reality.
This risk, known as underwriting (or actuarial) risk, is one of the main reasons that
reinsurance is needed.
[0007] Through reinsurance, a direct insurer can limit (as much as possible) annual
fluctuations in the losses it must bear on its own account, and be protected in case of
catastrophe. Reinsurance thus allows direct insurers to free themselves from the part
of a risk that exceeds their underwriting capacity, or risks which, for one reason or
another, they do not wish to bear alone.
[0008] Thus, the role of a reinsurance company is to insure insurance companies and
other risk-bearing organizations. Insurance companies (known as "ceding companies"
or cedents) purchase insurance from reinsurance companies (known as "accepting
companies" or reinsurers) to transfer some of their risk. This transfer of risk reduces
the volatility of financial results for the insurance company, even if an unusually high
number of claims or one especially large claim is submitted in one time period.
[0009] In some instances, reinsurers must spread their risks as well. When the
reinsurer is not able or willing to assume the entire risk that the insurer wants to cede,
the reinsurer may pass a portion of the risk to another reinsurer, called a
retrocessionaire. The process of ceding insurance risk from one reinsurer to another is
called retrocession.
[0010] There are various kinds of risks reinsured; along with large, complex property
and casualty risks, such as earthquakes and hurricanes, the most common types of risk
brought to reinsurers are mortality (life) and morbidity (health).
[0011] Direct insurers find relief from particularly large individual risks by ceding
them individually in the form for facultative reinsurance. In facultative reinsurance, the direct insurer (ceding company) is free to choose which particular, individual risks it wants to reinsure; and the reinsurer, for its part, is free either to accept or refuse any risk offered to it. The term facultative is used because both the insurer and the reinsurer have the ability or (faculty) to decide whether to cede or assume the particular risk involved. A direct insurer who elects to reinsure a risk facultatively
must present the reinsurer with a precisely defined offer containing all pertinent
information on the risk in question. The reinsurer, after detailed examination, will
decide whether or not to accept the offer. Risks ceded under facultative arrangements
are typically standard risks with unusual underwriting characteristics or substandard
risks.
[0012] In addition, entire portfolios containing all of a direct insurer's fire, motor, or
marine insurance policies, for example, are also the object of reinsurance. These
insurance portfolios are covered by blanket agreements, so-called obligatory
reinsurance treaties.
[0013] The process of facultative reinsurance placement is readily automated because
the process is systematic and capable of being handled through structured
documentation. There have been numerous attempts to automate facultative
reinsurance principally through structured documentation.
[0014] Obligatory (treaty) reinsurance is different. There is no systematic approach
to placing treaty reinsurance. In addition, the obligatory reinsurance placement
process makes extensive use of unstructured documents, in contrast to the facultative
reinsurance placement process, which can use structured forms and documents. Thus,
the obligatory reinsurance placement process is not amenable to full automation.
Nonetheless, there is a need for tools to facilitate the obligatory reinsurance placement
process and allow benchmarking. To be most useful in the obligatory reinsurance
placement process, reinsurance placement and creation tools must be specifically
designed for the obligatory reinsurance placement process rather than reinsurance
generally. Thus, recognition of the unique aspects of the obligatory reinsurance
placement process is an important part of the present invention.
[0015] Obligatory reinsurance is treaty reinsurance for entire portfolios: automatic
reinsurance. In obligatory reinsurance, the direct insurer is obliged to cede to the reinsurer a contractually agreed share of the risks defined in the reinsurance treaty; the reinsurer is obliged to accept that share: hence the term obligatory. The reinsurer cannot therefore refuse to provide insurance protection for an individual risk falling within the scope of the treaty, nor may the direct insurer decide not to cede such a risk to the reinsurer. As a rule, obligatory reinsurance treaties are terminable on an annual basis.
[0016] Both forms of reinsurance (facultative and obligatory) may be either
proportional or non-proportional in form. Proportional reinsurance requires both
parties to share premiums and claims according to specified amount of percentage
(quota share and excess). In all varieties of proportional reinsurance, the direct
insurer and the reinsurer divide premiums and losses between them at a contractually
defined ratio. According to the type of treaty, this ratio may be identical for all risks
covered in the contract (quota share reinsurance), or it may vary from risk to risk (all
other proportional reinsurance types). In all cases, however, the reinsurer's share of
the premiums is directly proportional to its obligation to pay any losses. For instance,
if the reinsurer accepts 90% of a particular risk and the direct insurer retains 10%, the
premium is apportioned at a ratio of 90:10.
[0017] Non-proportional reinsurance is issued when the amount or proportion of risk
is not known and the risk level depends upon a dollar amount or number of claims
(stop-loss or excess of loss). In non-proportional reinsurance, there is no set, pre
determined ratio for dividing premiums and losses between the direct insurer and the
reinsurer. Losses are apportioned according to the actual amount of loss incurred.
The treaty defines an amount up to which the direct insurer will pay all losses: the
deductible (other terms used include net retention, excess point; and priority). For its
part, the reinsurer obliges himself to pay all losses above the deductible amount and
not exceeding a contractually defined cover limit.
[0018] As the price for this cover, the reinsurer demands a suitable portion of the
original premium. In defining (rating) this price, the reinsurer considers the loss
experience of past years (experience rating) as well as the losses to be expected from
that type and composition of risk (exposure rating).
[0019] Thus, the reinsurance agreement only obliges the reinsurer to pay when the
reinsured portfolio or risk incurs an actual loss that exceeds the deductible amount.
[0020] The question of just how much reinsurance to buy is a complex matter of
business judgment at which every direct insurer must arrive at an answer consistent with its business strategy. A final decision will depend on a complex set of factors such as the decision to cede risk for reduced volatility or financial result management, willingness by the reinsurers to take on risk, the company's financial strength, and market conditions. At present, there is a need for tools to make the factors involved in this decision process more transparent and easy to understand.
[0021] As part of the insurance management process, an insurer must evaluate the
business requirement for reinsurance, and in that process, the cedent must arrange for
the creation, management, and placement of the reinsurance. The conventional
process for managing the creation and placement of reinsurance can take place either
directly from the cedents to the reinsurers or through a third party (e.g., broker). The
mechanisms of this transaction require exchanges of information, data, and requests.
These exchanges involve all concerned parties and traditionally take place via visits,
telephone, fax, mail, and e-mail.
[0022] Often, several iterations are necessary to reach an agreement between all
involved parties. Within the reinsurance placement transaction, mere is a definition of
the reinsured liabilities; a specification of the reinsurance premium; a specification of
the shares of all involved reinsurers in the liabilities and premium; and a specification
of any conditions or special terms associated with the transaction.
[0023] This process is repeated periodically since reinsurance products are ordinarily
reviewed and repriced annually unless market conditions dictate more frequent action.
For example, a regulatory change may require immediate repricing actions.
[0024] The processes and customs involved in the placement of reinsurance have
evolved over many years and are sufficient to enable billions of dollars of transactions
each year. Nonetheless, there is room for improvement. To begin with, there is a
need for a system and method for facilitating the purchasing of reinsurance for all of
the participants active in the markets. Moreover, there is a need for tools and
processes - both from the perspective of the client (cedent) and from the perspective
of the reinsurer.
[0025] From the cedent's perspective, it is desirable to streamline the business
process and collaboration according to standards desired by the cedent. Also, there is a need for systematic storage of each and every step in the placement process, for subsequent historical review. Cedents need processes, tools and data transparency to help manage their reinsurance portfolio and to purchase reinsurance in a cost-effective way and under competitive market conditions. Such tools should preferably provide an overview of a cedent's local reinsurance coverage on a global basis and allow a cedent to manage and monitor a worldwide generation or renewal of a reinsurance portfolio - from the creation of a submission and an initial reinsurance offer, through the tender stage, to the final acceptance of prices and shares.
[0026] From the perspective of the reinsurer, there is a need for a system and method
that eases the collection of standardized quality data from cedents and allows cedents to send selected portfolios to reinsurance participants (including electronic submissions).
[0027] Thus, there is a need for a system and method that meets these reinsurance-
purchasing needs. More specifically, there is a need for a system and a method that allow the cedent to manage and monitor world-wide renewals — from the creation of a submission and an initial reinsurance offer, through the tender stage, to the final acceptance of prices and shares. Moreover, there is a need for a system and a method that support both centralized and decentralized business decision-making models in an efficient reinsurance management process. Such a system and a method are particularly useful to the extent they include certain features such as:
• ease the collection of standardized quality data from the business units
• provide the cedent with an overview of its local reinsurance coverage within a global context

• support the steering of business processes and monitors defined responsibilities, ensuring that deadlines are met
• allow cedents to send selected portfolios to reinsurance participants (including electronic submissions)
• support benchmarking of reinsurance quotes so as to streamline collaborative decision-making
• can be customized to fit your company's unique structure, processes and reporting needs
• provides full security of the cedent's data and of information exchange with the reinsurer
• can be installed with the cedent or be hosted cost-efficiently.
[0028] From the vantage point of the reinsurer, there is a need for a tool that
streamlines the renewal process and offers the user all relevant client and treaty information in a single tool. It helps to get a consolidated view of the state of the renewal and to produce different reports on the whole business ceded by a cedent company.
SUMMARY OF THE INVENTION
[0029] The present invention facilitates the creation, management, and placement of
reinsurance. Built on a unified platform, the present invention enables collaboration
between all of the players involved in the reinsurance creation, management, and
placement process. The present invention enables the cedent to customize the
business process and collaboration in the invention according to standards and
business structure desired by the cedent. Moreover, the invention provides for the
storage of each and every step in the creation and placement process, for subsequent
historical review.
[0030] In facilitating the creation, management, and placement of reinsurance, the
system and method of the present invention support the collaboration of cedents and
reinsurers within a one-to-many relationship market-network, which can be defined as
the sum of human relationships, market behavior, accepted processes, and
(increasingly) electronic infrastructures that comprise the way of doing business. The
market-network becomes viable through the collaborative involvement of its
participants.
[0031] The present invention provides cedents with the processes, tools, and data
transparency that they need to manage their reinsurance portfolio and to purchase
reinsurance in a cost-effective way and under competitive market conditions.
Accordingly, a cedent can manage and monitor a worldwide generation or renewal of
a reinsurance portfolio - from the creation of a submission and an initial reinsurance
offer, through the tender stage, to the final acceptance of prices and shares. The
present invention supports both centralized and decentralized business decision
making models in the reinsurance creation, management, and placement process.
[0032] Based on this method and system, the present invention eases the collection of
structured or unstructured data from business units, provides a cedent with an overview of its local reinsurance coverages on a global basis, and distinguishes participants for each treaty or program. The present invention also enables a cedent to guide the business processes and monitor defined responsibilities, ensuring that deadlines are met. It supports benchmarking of reinsurance quotes by compiling quotes received from the market into an overview, thereby streamlining the collaborative decision-making process. The present invention is also customizable to suit an individual cedent's unique business model, processes, or reporting needs. The
present invention also provides full control and security of the cedent's
data/information exchanged with the reinsurer.
[0033] An embodiment of the present invention includes one or more of the following
novel features:
• The capture of the entire cedent's reinsurance creation and placement business process on a unified platform that involves all required players of the cedent;
• Having the invention customizable to the cedent's business process according to the standards desired by the cedent;
• The storage of each and every step in the process for historical review; and
• The storage of every discussion stream associated with business opportunity and program.
DEFINITIONS
[0034] The following definitions are provided for clarity in understanding this
specification. It should be understood, however, that the terms defined below and used throughout the specification and claims may have equivalent terms known to those skilled in the field of reinsurance. For example, what is generally referred to as a "program" in the U.S. reinsurance market is generally referred to as a "renewal" in the European reinsurance market. For this reason, the specification and the claims should not be limited to the particular terms used, but instead should be read to broadly encompass all equivalent terms known to those skilled in the art.
[0035] Annual Aggregated Deductible (AAD): This is an additional deductible - this
time at the layer level, which is first deducted from the sum of all losses occurring within the layer during the year, to arrive at the claim amount. AAD is the liability of the cedent and represents a floor. For example, if total loss amounts on layer 1 are $17 million and there is an AAD of $3 million, the net loss amount payable by the reinsurer is $14 million and the cedent pays the $3 million in addition to the original retention.
[0036] Annual Aggregated Limit (AAL): This represents the maximum amount for
which the reinsurer is liable, after taking into account the claims over a whole year. In effect, this represents a cap on the reinsurer's liabilities. For example, consider $10 million xs $10 million with an AAL of 10 million and claims of $15 million, $25
million, and $15 million. This equates to reinsurer payments of $5 million, $10
million, and $5 million. With the AAL, however, the reinsurer pays only 10 million
and the cedent pays the remainder as well as the retention.
[0037] Broker: A professional intermediary (person or organization) that, in return
for a commission or fee, brings together buyers and sellers of (re)insurance, advises
on (re)insurance needs, and negotiates (re)insurance with (re)insurers. Normally,
commission is received from the (re)insurer in consideration for brokering or placing
the business with them, but fees may also be charged by brokers to their clients. The
term is also used to denote the fee paid to a broker who arranges reinsurance cover for
a ceding office.
[0038] Business Opportunity: An umbrella type concept used for the grouping
together of related programs.
[0039] CAT XL: Catastrophe excess of loss reinsurance. Excess of loss reinsurance
for catastrophe risks in which retention and limit of liability apply to the sum of all
losses arising from the same event; unlike WXL/E coverage, a Cat XL is structured so
that coverage only applies when two or more risks are affected by a single event.
[0040] Commission Type: Commission Type ("fix" or "var") for proportional treaties
determines applicability of other commission fields. "Fix" implies that a pre
determined percentage of ceded premiums will be paid to cedent. "Var" implies that
the actual commission percentage will be determined retrospectively based on the loss
ratio (claims/earned premiums) actually experienced. In this case, maximum ("max")
and minimum ("min") commission percentages as well as associated min and max
loss ratios will be specified. At the start of the year, the provisional commission
(falling between the min and max commissions) will be used. At the end of the year,
the final commission is known.
[0041] Cover: Protection against losses provided under the terms of an insurance or
reinsurance contract. This is the reinsurer's liability amount in the event of a claim
that exceeds the deductible.
[0042] Deductible: In excess of loss reinsurance, the amount of loss retained by the
reinsured before the liability of the reinsurer attaches. Within a program, it is the amount at which each layer comes into play. Also called the excess (xs) point or priority.
[0043] Deposit Premium: Premium based on an estimate of the final premium and
paid at the beginning of a contract, which provides for future premium adjustments.
[0044] EPI: Estimated premium income ceded to reinsurers (for proportional
programs).
[0045] Geographical Inclusions/Exclusions: The geographical scope of the program,
which may be amended at the layer level by including and/or excluding countries or
regions.
[0046] Geographical Scope: Countries/regions (territorial risk) covered by a
program.
[0047] GNPI (Gross Net Premium Income): Gross premium written by the cedent,
less premiums ceded for proportional reinsurance; no deduction is made for expenses.
[0048] Layer: Section of cover. Mainly used in excess of loss reinsurance, where
total coverage may be divided into a number of consecutive layers that can be placed
with different reinsurers and have different loss profiles (lower layers attach more
often and are thus more expensive).
[0049] Layer Option: A variation on a particular layer within the same program,
resulting in different financial rates. For example, layer 1 option 1 includes fire and
water, while layer 1 option 2 includes only fire.
[0050] Leader: Reinsurer chosen based on its reputation or size to lead other
reinsurers in underwriting major risks and which usually assumes the largest share;
the leader often agrees on terms and conditions and assumes responsibility for
administering a shared contract.
[0051] Line of Business: Classification or grouping of insurance coverages which
provide protection for similar risks; e.g., property, casualty, life, etc.
[0052] Loading: Additional amounts of premium above the underwriter's normal risk
premium to allow for future administrative expense, loss escalation, and a reasonable
profit margin on non-proportional contracts (with VAR rate type).
[0053] Management Expenses /Administration Expenses: Percentage of written
premiums specified in the special conditions of a proportional reinsurance contract
(typically 5%, to offset administrative costs), which the reinsurer deducts from its
result before calculating the amount of profit commission it owes the cedent.
[0054] Minimum Premium: Smallest amount of premium for which a (re)insurer will
issue coverage under a given policy.
[0055] Negotiation Phase: The negotiation phase starts after the reinsurers have
provided initial quotes to the cedent. The cedent decides on preferred participants and
conducts a period of negotiation of allocated share and, possibly, rate. The end result
of negotiation is an agreed written share.
[0056] No Claims Bonus: A reduction of premium, expressed as a percentage of
ceded premium, allowed at the time of renewal to an insured that has made no claim
in the previous period or periods of insurance.
[0057] Number of Lines: In surplus reinsurance, the amount of liability retained by
the reinsured. Each surplus layer of reinsurance is expressed as a multiple of the
cedent's retention. For example, a "four-line" surplus share treaty affords reinsurance
for four times the "retention" (i.e., the liability retained by the cedent). This enables
the cedent to write five times as much insurance as was possible before reinsurance.
For example, if the reinsured retained a maximum of $100,000 liability per policy in a
given class of insurance, but wished to write policies for a maximum of $500,000 per
policy, a four-line surplus share treaty would accomplish the objective: it would
provide $400,000 of treaty capacity, with losses shared l-to-5 by the reinsured and 4-
to-5 by the reinsurer, beginning with the first dollar of loss.
[0058] Percent Ceded: Percent ceded by the primary insurer for quota share treaties.
The cedent and reinsurer share costs, liabilities, and premiums in the ratio specified.
[0059] Perils: Risks associated with a program. Main perils are defined at the
program level, but may then be amended at a layer level.
[0060] Premium: Amount paid to the reinsurer by the insurer for the accepted risk.
[0061] Premium Type: The Premium Type (Fixed, Flat, or Var) determines the
relevant quotation fields for non-proportional layers. "Fixed" implies that a single
percentage rate of actual GNPI will determine the reinsurance premium. "Flat"
implies that a pre-determined amount will comprise the reinsurance premium. "Var"
implies that a range of percentages (with minimum and maximum percentage values,
again tied to the GNPI) will determine the reinsurance premium. At the end of the
year, when the definite GNPI value is known, the burning cost will determine the final
fixed percentage rate within the variable minimum and maximum rates.
[0062] Profit Commission: An additional commission the reinsurer pays to the client
depending on profitability (based, for example, on a percentage of the profits, where
profits = ceded premiums - claims - commission - incurred reinsurer mgmt expenses)
or some other characteristic of the business written.
[0063] Program Name: Defines a unique program name for the program.
[0064] Program Option: A variation on a particular program quote, resulting in a
different financial offer. For example, program 'A' has two layers and program 'B'
has three layers.
[0065] Quota share: Proportional reinsurance. The quota share treaty is an
obligatory ceding treaty; that is, a formal agreement entered into between two parties
- the reassured and the reinsurer - under which the reassured is obliged to cede a
fixed percentage of all business covered by the treaty and the reinsurer is obliged to
accept all cessions so made. There may be limitations to the cover in respect of
natural perils and/or in respect of sums insured. A reinsurance commission will be
retained by the cedent to recompense for acquisition and costs.
[0066] Quotation Phase: The quotation phase allows the underwriter to enter values
such as risk rate, technical rate, and breakeven rate. At the end of the quotation phase,
the reinsurer provides a rate and share to the cedent.
[0067] Reinstatement: Additional cover to restore the limit of a non-proportional
reinsurance contract to its full amount after a loss. One reinstatement equals the full
amount of the original cover. The number of reinstatements can be limited/unlimited,
free/with cost, and use one of three prorata methods (temporis, amount, or both)
[0068] Share: The proportion, as a percentage, of the total risk undertaken by the
reinsurer. During the renewal process, the share provided by the reinsurer to the
cedent is captured during the quotation phase, at the end of the negotiation phase, and
finally at the end of the signing phase.
[0069] Signing Phase: The signing phase is the final phase in the treaty renewal
process. The final signed share (which normally is identical to the written share) is
entered.
[0070] Subject to NoC: The participants involved in a multi-year or continuous
program define a period known as Subject to Notice of Cancellation, where either
party has the right to cancel the program.
[0071] Surplus: Proportional reinsurance in which the cedent shares the risk with the
reinsurer on a pro rata basis. The proportion of the risk retained by the cedent is defined as a percentage of their maximum retention (= maximum or one line) to the
sum insured of the risk. The maximum cession to the surplus treaty is usually
expressed as a certain number of lines. There may be a second, third, or more surplus
treaty to provide automatic capacity for risks with higher sums insured, which exceed
the capacity provided by a first surplus treaty. Surplus is one of the oldest forms of
treaty reinsurance and still very common in property reinsurance. Premiums and
losses are shared pro rata, according to the individual proportion of cover for each
risk.
[0072] Treaty Capacity: Limit of liability of the reinsured against the insured.
Maximum amount of coverage that can be offered by a (re)insurer over a given
period, based on underwriting policy, financial strength, and market conditions.
Specific underwriting capacities may apply to single loss events or single risks. The
limit of capacity may also be imposed by law or by a regulatory authority.
Reinsurance provides insurers with additional underwriting capacity to help them
accept larger risks than would otherwise be possible and sometimes also to
accommodate existing policyholders by transacting types of business the insurers
would normally prefer to avoid.
[0073] Type ofGNPI: Flag indicating state of GNPI (either "written" or "earned").
[0074] Type of Treaty: Defines the type of treaty (e.g., CAT XL or Surplus) of the
program.
[0075] WXL/Event: Working excess of loss per event. This is valid for non-
proportional insurance. Working excess of loss reinsurance in which retention and
cover apply to the sum of all losses arising from the same event. Unlike a Cat XL,
there is no two-risks warranty and the deductible is low enough for coverage to be
triggered by a single risk.
[0076] WXL/Risk; Working excess of loss per risk. This is valid for non-proportional
insurance. Working excess of loss reinsurance in which the deductible and cover are
applied individually for each risk, irrespective of whether losses derive from a single
event.
BRIEF DESCRIPTION OF THE DRAWINGS
[0077] Figure 1 is a flowchart depicting the four phases of the reinsurance placement
process, according to an embodiment of the present invention.
[0078] Figures 2A and 2B are schematic diagrams of exemplary system architectures
for implementing the method of the present invention, according to an embodiment of
the present invention.
[0079] Figure 3 is a flowchart describing the four phases of Figure 1 in more detail,
according to an embodiment of the present invention.
[0080] Figure 4 is a flowchart describing an exemplary method by which a cedent
collects risk data and assesses reinsurance needs, according to an embodiment of the
present invention.
[0081] Figure 5 is a flowchart describing an exemplary method by which a cedent
prepares renewal packages and dispatches the packages to reinsurers, according to an
embodiment of the present invention.
[0082] Figure 6 is a flowchart describing an exemplary method by which a reinsurer
provides a reinsurance quote, according to an embodiment of the present invention.
[0083] Figures 7A and 7B are flowcharts describing an exemplary method by which a
cedent and a reinsurer, respectively, evaluate quotes and negotiate reinsurance
placement, according to an embodiment of the present invention.
[0084] Figure 8 is a flowchart describing an exemplary method for completing the
placement of reinsurance business, according to an embodiment of the present
invention.
[0085] Figures 9A-9E are exemplary screen images through which a cedent manager
creates a business opportunity, according to an embodiment of the present invention.
[0086] Figures 10A and 10B are exemplary screen images through which a cedent
transactor collects and publishes risk data, according to an embodiment of the present
invention.
[0087] Figures 11A-11G are exemplary screen images through which a cedent
manager prepares and sends a reinsurance structure proposal, according to an
embodiment of the present invention.
[0088] Figures 12A-12E are exemplary screen images through which a cedent
manager creates a dispatch of a request for quotation, according to an embodiment of
the present invention.
[0089] Figures 13A-13D are exemplary screen images through which the reinsurer
provides a quotation for the program proposed by the cedent, according to an embodiment of the present invention.
[0090] Figures 14,15,16A, and 16B are exemplary screen images through which a
cedent receives quotations returned by reinsurers, according to an embodiment of the
present invention.
[0091] Figures 17A-17C are exemplary screen images through which a cedent
manually enters a quotation returned by a reinsurer, according to an embodiment of
the present invention.
[0092] Figures 18A-18C are exemplary screen images through which a cedent
manager compares quotations of reinsurers, according to an embodiment of the
present invention.
[0093] Figure 19 is an exemplary screen image through which a cedent manager
prepares participation conditions to be negotiated with reinsurers, according to an
embodiment of the present invention.
[0094] Figures 20A-20C illustrate the contents of an exemplary downloaded file for a
request for written share, according to an embodiment of the present invention.
[0095] Figures 20D and 20E illustrate exemplary screens through which a reinsurance
officer manually enters written shares, according to an embodiment of the present
invention.
[0096] Figures 21A and 21B are exemplary screen images through which a cedent
manager receives offered written shares returned by reinsurers, according to an
embodiment of the present invention.
[0097] Figure 22A and 22B are exemplary screen images through which a cedent
manager reviews all offered written shares returned by reinsurers and assigns final
shares, according to an embodiment of the present invention.
[0098] Figures 23A and 23B are screen images illustrating the contents of an
exemplary downloaded file for the confirmation of final signed shares, according to
an embodiment of the present invention.
[0099] Figures 24A and 24B are exemplary screen images providing program and
portfolio reports for a cedent, according to an embodiment of the present invention.
[00100] Figures 25A-25C are exemplary screen images through which a reinsurer can
copy an existing program into a new program, according to an embodiment of the
present invention.
[00101] Figure 26 is an exemplary screen image illustrating an exemplary mouse-over
text help feature, according to an embodiment of the present invention.
DETAILED DESCRIPTION OF THE INVENTION
[00102] An embodiment of the present invention is a process manager, document
management system, and collaboration platform for the creation, management, and
placement of a reinsurance portfolio. The present invention accompanies the involved
individuals of all parties throughout the reinsurance portfolio creation, management,
and placement process, and facilitates their interactions in a standardized, yet
customizable, fashion - including the management and storage of related documents
and data.
[00103] All cedents and reinsurers have traditions that they are not willing to give up.
This reality is due to their hierarchical structures, their established internal business
processes, and the existing software they are using for functions such as treaty
administration, accounting, and pricing. To take these idiosyncrasies into account, the
process manager of the present invention includes two systems: a cedent system and
a reinsurer system. Each system can be highly customized, to adapt to the
requirements of each party.
[00104] Figure 1 summarizes an exemplary reinsurance creation, management, and
placement process, according to an embodiment of the present invention. As shown,
the process includes four phases.
[00105] In phase 1, a cedent sets parameters for a reinsurance study or request, and
collects exposures, or risk data, to assess whether the cedent needs reinsurance. If the
cedent determines that there is a need for reinsurance, then the cedent generates and
validates proposed submissions, which include one or more proposed submission
programs. The programs each provide the data and documentation that reinsurers will
need to provide a corresponding quotation/offer for reinsurance. At the conclusion of
phase 1, the proposed submissions and programs are approved and ready to include in
a renewal package for distribution to the market.
[00106] In phase 2, the cedent dispatches the renewal package to one or more
reinsurers. Upon receipt, the reinsurers evaluate the renewal package, prepare
quotations, and dispatch those quotations back to the cedent. At the conclusion of
phase 2, the cedent has imported or entered into its system responses to requests for
quotation from the one or more reinsurers.
[00107] In phase 3, the cedent evaluates the reinsurers' quotations, compares
quotations received from different reinsurers (if more than one reinsurer participates),
and consults with the reinsurers to negotiate for the most favorable reinsurance
program conditions {e.g., terms, participation, and price). The cedent decides upon a
final reinsurance program structure and price. The cedent dispatches requests for
written shares to chosen reinsurers, in which the cedent may propose participation
amounts. At the conclusion of phase 3, the cedent has received reinsurance proposals
for written shares.
[00108] In phase 4, the cedent evaluates the proposed participations in light of the
agreements reached in phase 3, and decides on and captures final shares. At the
conclusion of phase 4, the cedent and the chosen reinsurers sign off on a final share,
price, and conditions, thus completing the placement of the reinsurance business.
[00109] Figure 2A illustrates an exemplary system 200 for implementing the process
shown in Figure 1. As shown, system 200 includes at least one cedent computer 206
in communication with a host server 201 through a computer network 204. Host
server 201 is, in turn, in communication with a secure file transfer server 202 through,
for example, a local area network (LAN)- Computer network 204 is, for example, the
Internet.
[00110] Host server 201 executes the process of the present invention for the cedent.
Host server 201 also stores data associated with the cedent's reinsurance creation,
management, and placement process and is adapted to communicate with cedent
computer 206 using e-mail, document publishing, and Web browsing, as well as with
secure file transfer server 202 using a secure file transfer. Host server 201
communicates with reinsurer's computer 208 using, for example, e-mail via network
205, for notifying reinsurers of the availability of dispatch data stored on secure file
transfer server 202.
[00111] Cedent computer 206 displays the graphical user interface (GUI) through
which a cedent interacts with host server 201 and completes the process of the present
invention. Web application 222 provides the GUI to cedent computer 206. This
cedent GUI is referred to herein as the cedent interface. Cedent computer 206 does
not require special software, other than a browser.
[00112] Upon dispatch of a renewal package, host server 201 creates files for each
selected reinsurer and stores the program quote sheet and additional documentation to secure file transfer server 202. Host server 201 sends a notification to the computers of reinsurers 208 through network 205, which could be the same network as network
204. Host server 201 also communicates with reinsurer computers 208 through
network 205, with web application 222 providing a GUI to reinsurer computers 208.
Optionally, instead of a browser-based interface provided by host server 201,
reinsurer computers 208 could be provisioned with an interface application that
cooperates with file transfer server 202 to download data and store it locally on
reinsurer computers 208. In any case, the reinsurer GUI is referred to herein as the
reinsurer interface.
[00113] In a specific implementation of the present invention, reinsurer computers 208
do not require special software, other than a browser. Reinsurer computers 208
receive communications from host server 201 and cedent computer 206 using, for
example, e-mail to receive notifications of requests for quotation and to return offers
and shares.
[00114] In the case in which a cedent places reinsurance within its own legal entity
{i.e., the insurance company consolidates its insurance into its own reinsurance
company or division), network 205 could be a corporate intranet in direct
communication (i.e., not through a public network) with host server 201.
[00115] Although computers 206 and 208 are labeled cedent and reinsurer,
respectively, one of ordinary skill in the art would appreciate that brokers or other
representatives of the cedent and reinsurer could be users of computers 206 and 208.
Likewise, any references herein to cedents and reinsurers should be interpreted to
include any other possible representatives of these parties. For example, reinsurers
could also include managing general agents and brokers. In a preferred embodiment,
however, only cedents have access to cedent computer 206 and host server 201, and
not reinsurers.
[00116] As shown in Figure 2A, an exemplary host server 201 contains several
applications to execute the processes of the present invention, including, for example, a process engine 210, a document store 212, a spreadsheet application 214, a reporting application 216, a document publishing and dispatch application 218, an e-mail application 220, and a web application 222. Host server 201 could also include a security gateway. An exemplary file transfer server 202 contains several applications to store and administer dispatch information, including, for example, a document publishing application 230, a spreadsheet application 231, and a security gateway 232.
[00117] Process engine 210 controls information flow between the participating cedent
parties to execute the processes of the present invention. An example of a suitable
process engine 210 is ActionWorks™ produced by Action Technologies, Inc. of
Alameda, California.
[00118] Document store 212 stores files and related metadata, for example, on host
server 201 or a Structured Query Language (SQL) database on host server 201.
[00119] Spreadsheet application 214 creates spreadsheets on which structured renewal
data is imported. With the data imported, file transfer server 202 distributes the
spreadsheets to the reinsurers, which then provide quotations on the spreadsheets.
[00120] Reporting application 216 provides summarized and detail reports of cedent
and reinsurer data stored on host server 201 for the cedent. In presenting the reports
to the cedent, reporting application 216 cooperates with the cedent interface
provisioned on cedent computers 206.
} 0 01211 Document publishing and dispatch application 218 prepares one dispatch file
per reinsurer as selected by the cedent and sends all of them to secure file transfer
server 202. Application 218 enables a user to associate, attach, delete, copy, and view
documents. Application 218 is, for example, an Active Server Page (ASP)
application. In an embodiment of the present invention, document publishing and
dispatch application 218 is accessible through two GUI mechanisms, which both
include folder tabs that display the contents of document folders for a given
reinsurance business opportunity or program. In the first mechanism, a publishing
icon within a program or business opportunity view, when selected, shows documents
for the relevant program or business opportunity. In the second mechanism, for "draft
documents" (business opportunity level) or "documents," a user can "browse"
programs and business opportunities in a database using pop-down menus (populated
by an ASP query of relevant business database). The ASP script displays eligible
programs or business opportunities and allows users to select a program or a business
opportunity to access the associated documents.
[00123] E-mail application 220 sends e-mails from host server 201 to computers 206
and 208. E-mail application 220 can use any of the well-known protocols for sending and receiving e-mail, e.g., Simple Mail Transfer Protocol (SMTP), Post Office Protocol 3 (POP3), and Internet Message Access Protocol (MAP).
[00124] Web application 222 receives and responds to HTTP requests from computers
206. An example of a suitable web application 222 is a Microsoft Internet
Information Server™.
[00125] File transfer server 202 stores the files of programs that have been dispatched
to the reinsurers. In an embodiment of the present invention, as a program is
dispatched to selected participants from host server 201, application 230 creates
separate directories on file transfer server 202 for each reinsurer (accessible by the
reinsurer with a unique usemame and password) in which that particular reinsurer's
dispatch files are stored. The dispatch files are preferably self-extracting, compressed
files, containing Excel spreadsheets and supplemental documents. In response to e-
mail notifications sent from host server 201, the reinsurers download the dispatch files
from file transfer server 202. The e-mail notifications can include URL links to file
transfer server 202 itself (opening this URL link commences the download) as well as
the e-mail address of the cedent to which the quotation responses should be sent.
[00126] By maintaining file transfer server 202 apart from host server 201, the present
invention ensures that reinsurers do not have access to confidential cedent information
(e.g., risk data) stored in host server 201. The separate file transfer server 202 also
simplifies file structures and helps avoid capacity problems that might arise if the
dispatch files were stored together with the applications of host server 201. In
addition, separating host server 201 and file transfer server 202 helps prevent an
unauthorized user who has breached the security provisions of file transfer server 202
from reaching the applications operating on host server 201.
[00127] Of course, notwithstanding these benefits, one of ordinary skill in the art
would appreciate that host server 201 and file transfer server 202 could be a single
server. In addition, although Figure 2A shows multiple functions provisioned on host
server 201 and file transfer server 202, as one of ordinary skill in the art would
appreciate, the functions could be distributed among multiple servers (e.g., tiered
architecture).
[00128] With the reinsurance process of Figure 1 and the system architecture of Figure
2A in mind, Figure 2B illustrates an exemplary system and method for performing dispatches to reinsurers and for receiving corresponding responses. These dispatches can involve, for example, requests for quotations, requests for written shares, or requests for final signed shares. The method begins with structuring the parameters of
the dispatch on host server 201, including the selection of renewal programs and
participants. Then, as shown in step 251 of Figure 2B, the method continues by
dispatching a program(s) from host server 201 to file transfer server 202. Then, in
step 252, host server 201 forwards e-mail notifications to the reinsurers 208,
informing them of the new dispatch and preferably providing a URL link through
which to access (e.g., download or copy) the dispatch files.
[001.29] In a specific implementation of the present invention, step 251 of Figure 2B
involves creating an Excel Spreadsheet (for "structured" data) for a reinsurer by
querying relevant data from host server 201 and inserting this data into a new
spreadsheet based on an Excel template. An XML file can also be created
simultaneously. This process is performed by code in embedded in process engine
210. Process engine 210 then copies relevant folders out of document publishing
folders into a staging area and zips them together with the Excel file into a self-
extracting archive. The zipped file is then pushed onto file transfer server 202 and
copied into the directory for each selected participant. The target directory on this
server 202 is linked to the reinsurer recipient. Finally, host server 201 forwards to the
reinsurer recipient an e-mail containing the URL of the appropriate download point on
file transfer server 202.
[00131] Continuing in step 253, after preferably providing identifications and
passwords necessary to connect to file transfer server 202, the reinsurers 208
download the dispatch data, including, for example, program documents and a
spreadsheet file in which to enter a quotation. The reinsurers analyze the data,
perform off-line calculations, and enter quotations in the spreadsheet file. Then, in
step 254, each reinsurer e-mails the spreadsheet file to the cedent 206.
[00132] In step 255, cedent 206 imports the quotation from each reinsurer into host
server 201. This import can simply involve the cedent 206 typing in the quotation manually into the reinsurance program stored on host server 201. Preferably, however, the import is at least partially automatic such that the content of the spreadsheet file is entered automatically into the reinsurance program. In this case, cedent would load the spreadsheet file into host server 201. The spreadsheet could include an identifier that indicates the program and cedent to which it pertains (this identifier would have been included in the download to the reinsurer in step 253).
Then, recognizing this identifier, host server 201 would associate the quotations with
the appropriate reinsurance program and cedent.
[00133] In a further embodiment of the present invention, before associating the
quotation with the appropriate reinsurance program and cedent, host server 201
performs a plausibility check on the program structure and quotation to ensure that the
program structure is unchanged and that the entered values make sense. For example,
the plausibility check may test for overlapping deductibles or for an attachment point
on a layer that is higher than the sum of the cover and the deductible on a preceding
layer. If an error is found, host server 201 could alert the cedent, in which case the
cedent could e-mail the request for quotation back to the appropriate reinsurer for
correction, or do so manually.
[00134] With the quotations imported and re-associated with the program, host server
201 then provides cedent 206 with software tools for analyzing the quotations and
continuing with the reinsurance placement process (for example, with further program
dispatches and/or dispatches of requests for written shares and signed shares). As an
optional step 256, after the quotations have been imported into host server 201, host
server 201 can send an e-mail notification to one or more of the reinsurers confirming
the processing of the quotations.
[00135] Figure 2B illustrates a dispatch system architecture in which host server 201
and file transfer server 202 reside at the facilities of cedent 206 behind cedent
firewalls 260 and 261. In an alternative embodiment, however, host server 201 and
file transfer server 202 reside at the facilities of a third-party administrator. In this
alternative architecture, both host server 201 and file transfer server 202 communicate
with cedent computers 206 and reinsurer computers 208 through one or more
firewalls (e.g., internal and external firewalls) and the Internet, network 204 and 205.
[00136] According to a further embodiment of the present invention, Figure 3
illustrates in more detail the four phases 1,2, 3, and 4 of the reinsurance process (as shown in Figure 1). Specifically, Figure 3 illustrates the individual steps of each phase of the reinsurance creation, management, and placement process, tracing the process from the assessment of a cedent's reinsurance needs through to the placement of the reinsurance business. Figure 3 also shows the participants 310 involved in each step {i.e., the cedent and/or the reinsurer), the interface that a participant uses in each step (i.e., cedent interface 312 or reinsurer interface 314), and the particular phase in
which the interface operates for a given step. To provide a graphical correlation, in
Figure 3, the participants and the interfaces corresponding to a step are listed under
the block representing the step.
[00137] Within the processes of Figure 3, the participants 310 that are completing the
steps can freely move back to any previous action within a given phase (i.e., phases 1,
2,3, and 4). This process flow allows loops and iterations to take place. In one
embodiment, however, after a participant completes the steps of a phase, the steps of a
previous phase cannot be performed again. In another embodiment, a participant
cannot start a step without fully completing the prior step. This latter embodiment
would prevent, for example, a user from entering a proposed submission before all
risk data is collected and made available.
[00138] Cedent interface 312 and reinsurer interface 314 are the user interfaces
through which participants 310 interact to complete the process of Figure 3. As
shown, the cedent interacts with cedent interface 312 through four stages: collect data
316, prepare request for quotation 318, evaluate quotes and negotiate 320, and place
business 322. A reinsurer interacts with reinsurer interface 314 through three stages:
quotation 324, negotiation 326, and signing 328.
[00139] By showing phases, steps, participants, and stages on concurrent lines of
progression from left to right, Figure 3 illustrates how each of the stages of cedent
interface 312 and reinsurer interface 314 corresponds to phases 1-4, to steps 301-308,
and to participants 310. The concurrent lines of progression also show how the stages
of cedent interface 312 correspond to the stages of reinsurer interface 314. Thus, for
example, Figure 3 shows that step 307 is a part of phase 3, that the cedent and the
reinsurers are the participants 310 involved in step 307, that the cedent interacts with
stage 320 of the cedent interface 312 during step 307, and that the reinsurer interacts
with stage 326 of the reinsurer interface 314 during step 307.
[00140] To encompass the various business models and idiosyncrasies of individual
cedents and reinsurers, Figure 3 identifies participants 310 in a general fashion (i.e., cedent or reinsurer). It should be understood, however, that these participants 310 could be further subdivided to describe, for example, the roles, responsibilities, and authorizations associated with a particular cedent or reinsurer. Thus, for example, a cedent could customize the process shown in Figure 3 by associating particular job titles or roles to the performance of steps in the process. As an example of this
customization, the following table provides exemplary roles within the cedent and reinsurer organizations, including the level at which each role is active, and the responsibilities assigned to each role. As shown in Table 1, the two principal roles within the cedent and reinsurer are the manager and the transactor. The manager is an organizational unit (e.g., a person or group of persons) that makes decisions about reinsurance structuring and sales. The transactor is an organizational unit (e.g., a person or group of persons) that performs the operational execution. The managers and transactors can be further divided into sub-roles of individuals or groups, as shown in Table 1 below.
Table 1 - Cedent and Reinsurer Roles
(Table Removed)
[00141] The following description of the process of Figure 3 incorporates these
exemplary roles and sub-roles. As one of ordinary skill in the art would appreciate,
even though following description may discuss specific sub-roles completing steps,
those steps could generally be completed by others of the same role or participant.
For example, a step completed by a lead reinsurance officer could generally be
completed by another type of cedent manager. In addition, the particular names given
to the roles and sub-roles should not be interpreted as limiting the invention. Indeed,
it is common for different insurance and reinsurance organizations to use different
terms. For example, reinsurance officers are sometimes referred to as cedent officers,
profit center managers are sometimes referred to as underwriter managers, and lead
reinsurance officers are sometimes referred to as reinsurance managers.
[00142] As shown in Figure 3, the reinsurance creation, management, and placement
process begins in step 301 with the collection of exposures and the assessment of
reinsurance needs. Specifically, through cedent interface 312, a reinsurance officer of
the cedent collects reinsurance requirements. The reinsurance officer initiates this
process by creating a "business opportunity," which is an umbrella record that
encompasses any insurance business area that could use reinsurance. The reinsurance
officer may request that certain profit center managers collect risk exposure data,
including any renewal-relevant information and documents, and provide this risk
exposure data to the reinsurance officer. Upon receipt of the risk data, the reinsurance
officer collates the risk data and evaluates the potential for reinsurance. If the
reinsurance officer sees a need, then the process continues. If no need exists, then the
process ends.
[00143] Assuming an opportunity or need for reinsurance exists, then, in step 302, the
reinsurance officer creates one or more proposed submissions, or reinsurance programs. The reinsurance officer may then ask the profit center managers to review and attach any additional related information to the programs. Upon approval by the profit center managers, the reinsurance officer further consolidates the documentation and renewal data. At this any stage prior to dispatching the request to the marketplace, the reinsurance officer may optionally choose to electronically forward the draft reinsurance programs to certain reinsurers and/or brokers to solicit their feedback on the program structure and supporting documentation.
[00144] After the reinsurer/broker feedback is received and incorporated, in step 303,
the receiving officer validates the proposed reinsurance programs by requesting a
review of the programs by the lead reinsurance officer. In response to the lead
reinsurance officer's review comments, the reinsurance officer modifies the proposed
programs and designates the programs as ready for dispatch.
[00145] In step 304, the reinsurance officer or the lead reinsurance officer selects
which programs, from among the pool of approved, released programs, should be
dispatched to which reinsurer. In response, a communication (e.g., an e-mail) is sent
to the corresponding reinsurers, making available a request for quotation package that
contains the selected programs.
[00146] In step 305, the reinsurer reviews the request for quotation, prepares a
quotation in response to the request, and returns the quotation to the cedent.
[00147] In step 306, the reinsurance officer of the cedent receives and compares the
quotations from the reinsurers.
[00148] In step 307, the reinsurance officer consults with the reinsurers and negotiates
the precise details and price of the reinsurance program(s). At the conclusion of these
negotiations, the reinsurance officer captures the final program structure and prices.
The reinsurance officer then selects reinsurers from whom the reinsurance officer
wishes to receive a written share proposal and dispatches a request for written share to
the selected reinsurers. In response, the reinsurers forward their written share
proposals to the reinsurance officer.
[00149] In step 308, the reinsurance officer of the cedent receives and compares the
written share proposals from the reinsurers, interacts further with the reinsurers as
necessary, selects the final shares, and notifies the reinsurers of the placement of the
reinsurance business. The reinsurance officer captures the final shares and dispatches
these values plus any final electronic placement or contract data to the reinsurers. The
result is a definite signed share and price. The reinsurance placement process
concludes with the selection of final shares and notification of placement of the
reinsurance business.
[00150] In a further embodiment of the present invention, Figures 4-8 describe in more
detail steps 301-308 of Figure 3. Figure 4 is a flowchart describing an exemplary method for completing step 301 (i.e., collection of risk data and assessment of reinsurance needs). Figure 5 is a flowchart describing an exemplary method for
completing steps 302,303, and 304 (ie., preparation of a renewal package and
dispatching of the package to reinsurers). Figure 6 is a flowchart describing an
exemplary method for completing step 305 (i.e., reinsurers quote). Figures 7A and
7B are flowcharts describing an exemplary method for completing steps 306 and 307
(i.e., evaluation of quotes and negotiation). Finally, Figure 8 is a flowchart describing
an exemplary method for completing step 308 (i.e., placement of business).
[00151] For purposes of the following descriptions relating to Figures 4-8, the term
"unstructured" refers to data that is in no specific format. For example, unstructured
data could be an unlimited amount of text or an attachment file. In this manner, a user
can attach data in any format and can receive data in any format. In contrast to
unstructured data, the term "structured" refers to data that adheres to a specific
format. For example, structured data could be data entered into a data field of a
limited length, data entered into a formatted list, or data entered into a formatted file.
In this manner, a user can be required to enter data according to a specific format.
[00152] According to an embodiment of the present invention, at any stage within the
entire processes of Figure 3 (and the subprocesses of Figures 4-8), unstructured
comments can be added and associated with a renewal. Any entered structured or
unstructured data is permanently stored for historical review.
[00153] Phase 1. Steps 301-303
[00154] Figure 4 outlines an exemplary method for the collection of data and the
assessment of reinsurance needs (step 301 of Figure 3). As shown, the method begins
in step 400 with the selection of an insurance business that maybe of a potential
reinsurance need, which triggers the initiation of data requests in order to determine
whether there is sufficient business or risk to initiate the reinsurance process. At this
initial step, the cedent recognizes a potential need to transfer a part of the hazards or
risks that the cedent has assumed to a second insurance carrier (the reinsurer).
[00155] After identifying a potential reinsurance need, the cedent manager of the
cedent (e.g., either the lead reinsurance officer or the reinsurance officer) creates a business opportunity, as shown respectively in steps 402L and 402R. (The horizontal rows of Figure 4 indicate which participant role (e.g., lead reinsurance officer, reinsurance officer, or profit center manager) within the cedent is completing the step.) The business opportunity defines the potential reinsurance need and serves as an umbrella record in which to organize and manage information relevant to the
potential reinsurance need. The scope of the business opportunity is flexible and is
defined by the cedent manager {e.g., the lead reinsurance officer or reinsurance
officer). The business opportunity can lead to one or more future requests for
quotation and reinsurance programs. In creating the business opportunity, the cedent
manager can define specific qualifiers associated with the potential reinsurance need,
such as lines of business or geographical areas. Unstructured data, such as
questionnaires, documents, or templates of any file format, can be attached to the
business opportunity.
[00156] Figures 9A-9E illustrate a series of exemplary graphical user interfaces
through which a cedent manager {e.g., a lead reinsurance officer or reinsurance
officer) creates a business opportunity (i.e., completes step 402L or 402R). As shown
in Figure 9 A, a user {e.g., cedent manager) first clicks on collect data button 900 to
open the "Collect Data" screen 902. The user then selects an appropriate
organizational structure and clicks on the "Create new Bus. Opp." button 904. In
response, the system presents the user with an "Enter New Business Opportunity
Data" screen 906, as shown in Figure 9B. The user is required to enter a business
opportunity name in data field 908. The remaining data fields {e.g., geographical
scope of risk, line of business, and sub line of business) can be left empty if unknown
at this stage. Completion of these fields is required later if the user determines that
reinsurance is necessary and creates one or more related programs. The data fields of
Figure 9B require structured input.
[00157] After the user names the business opportunity, the system presents the screen
910, as shown in Figure 9C. In this screen 910, the cedent manager can add documents to the business opportunity and can designate the profit center managers who should provide the risk data. As shown, screen 910 provides a table 912 that summarizes the data associated with the business opportunity with which the user is working. Screen 910 provides data fields 914, in which the user selects the profit center managers responsible for providing risk data and specifies a deadline by which the profit center managers should return the data. Screen 910 also provides a comment data field 916, in which the user can add supplemental notes to be included in an e-mail communication sent to the selected profit center managers. The data fields of Figure 9C require structured input.
[00158] Screen 910 also provides a document link 918. The user clicks on link 918 to
access a document publishing feature, and to add documents to or view existing
documents of the business opportunity. In response to the user's selecting link 918,
the system presents a document publishing window 921, as shown in Figure 9D.
Through window 921, the user can add any type of document to the business
opportunity. The documents are published into folders. The user clicks on one of
folder tabs 922 to select a folder and display the contents of the folder in contents
window 924 (which contains no documents in the example of Figure 9D).
[00159] To locate a desired file, the user either types the path and filename in field 926
or clicks on the browse button 928. If the browse button 928 is activated, the system
provides a browse window 930. The user navigates through window 930 and selects
the desired file to be attached, which is then listed in field 926. Once the desired file
is listed in field 926 (either by typing it or browsing and selecting), the user clicks the
add file button 932 to attach the desired file to the business opportunity. The desired
file is then listed in contents window 924.
[00160] To remove a file listed in contents window 924, the user highlights the file and
clicks the delete button 934. As shown in Figure 9E, an uploaded file can also be
moved between folders 922 by highlighting the file in contents window 924, select the
new folder to receive the file in drop down menu 936, and clicking the move button
938. To view a file, a user selects the file in contents window 924 and clicks the view
button 940.
[00161] After the user adds the desired documents to the business opportunity, the user
closes document publishing window 921 and returns to screen 910 of Figure 9C. The
user then clicks the start process button 920 to forward the business opportunity and
its associated documents to the selected profit center managers. The selected profit
center managers receive an e-mail notification. Returning to Figure 4, this e-mail
notification corresponds to step 404L or 404R, depending on whether a cedent
manager {e.g., a lead reinsurance officer or a reinsurance officer) has created the
business opportunity.
[00162] Continuing in Figure 4, in response to the e-mail notification requesting risk
data, in step 406, the profit center managers access the cedent interface, review any documents and data provided with the business opportunity, and then attach their own files containing reinsurance data pertinent to the business opportunity.
[00163] Figures 10A and 10B illustrate a series of exemplary graphical user interfaces
through which a profit center manager collects and publishes risk data in completing
step 406. To attach risk data, the profit center manager uses graphical user interfaces
substantially identical to those described above for document publishing by a lead
reinsurance officer or a reinsurance officer (steps 404L and 404R, and Figures 9C-
9E). After the profit center manager has collected and attached the risk data, cedent
interface 312 presents a collecting data screen 1002, as shown in Figure 10A. Then,
to publish the risk data, the profit center manager selects the "Risk data is published"
option in the "Select response option" data field 1004 and clicks the "Go" button
1006.
[00164] In response, the system displays a comment screen 1008 as shown in Figure
10B. In screen 1008, the profit center manager can enter a comment in data field
1010 to be sent to the reinsurance officer along with the published risk data. Clicking
the "submit response" button 1012 sends the risk data and any comment(s) back to the
reinsurance officer. In a representative embodiment of the present invention, the
document publishing tool that the profit center managers use to attach documents and
publish risk data prevents the profit center managers from viewing each others
documents and risk data.
[00165] Returning to Figure 4, after the profit center manager submits the risk data, in
step 408, the reinsurance officer reviews the information to determine if the quality,
completeness, accuracy, and detail of the information are acceptable.
[00166] If, in step 408, the reinsurance officer finds the risk data unacceptable, then the
reinsurance officer requests that the profit center manager provide additional or
corrected data, and the process returns to step 406. If the risk data is acceptable, then
the reinsurance officer has two options for proceeding: either completing step 410
and then 412, or skipping optional step 410 and proceeding directly to step 412. Step
410 is depicted in Figure 4 with dash lines to indicate that it is an optional step.
[00167] In optional step 410, as part of the reinsurance officer's analysis of the
business opportunity and the associated data returned by the profit center manager, the reinsurance officer models specific descriptions that outline possible reinsurance purchasing scenarios. These scenario descriptions help the lead reinsurance officer or reinsurance officer in deciding whether reinsurance is needed and in better understanding the different possible approaches to purchasing the reinsurance.
[00168] In step 412, the lead reinsurance officer reviews the published risk data and
the scenario descriptions (if applicable) and decides whether the cedent needs
reinsurance, and, if so, what type of reinsurance. Optionally, instead of the lead
reinsurance officer, the reinsurance officer can make this assessment.
[00169] If it is determined that the cedent does not need reinsurance, then the process
ends at step 414. If, however, the cedent does need reinsurance, then the process
continues in step 416, in which the cedent recognizes that a quotation for reinsurance
is required. Step 414 marks the end of the exemplary method for the collection of
data and the assessment of reinsurance needs (step 301 of Figure 3), as well as the
data collection stage 316 (Figure 3) of cedent interface 312.
[00170] Returning to Figure 3, after the cedent has determined that a need for
reinsurance exists (in step 301), the reinsurance creation, management, and placement
process continues in step 302 with the generation of proposed submissions. Step 302
also marks the beginning of stage 318 (prepare request for quotation) of cedent
interface 312.
[00171] Figure 5 outlines an exemplary method for completing step 302 (as well as
steps 303 and 304 of Figure 3). As shown, the method begins in step 500 with the
reinsurance officer preparing structure proposals. Specifically, the reinsurance officer
analyzes the published risk data, determines the reinsurance needs, and defines
reinsurance programs. The programs are treated as structured data. A "program"
consists of related reinsurance treaties and covers (non-proportional and proportional).
The programs that the reinsurance officer enters consist of a series of structured data
(e.g., fixed database fields detailing characteristics of the reinsurance covers), as well
as unstructured data or attachments (e.g., document attachments such as Microsoft
Word™ files, Excel™ files, and PDF files). Some of the files can be released directly
to reinsurers as part of the request for quotation, while other files can by retained in
special private folders. The reinsurance officer can also define program or layer
options, which are alternatives to the reinsurance covers within a program, for which
the reinsurance officer wishes to receive separate quotations. At the conclusion of
step 500, the reinsurance officer sends the structure proposals to the profit center
manager.
[00172] Figures 11A-11G illustrate a series of exemplary graphical user interfaces
through which a reinsurance officer prepares and sends a structure proposal (/. e., step
500). As shown in Figure 11 A, the system presents a "prepare submission" page
1100, through which the reinsurance officer can create reinsurance programs. To
enter a new reinsurance program, the reinsurance officer selects the business area,
which is the hierarchical or geographic corporate structure of the cedent, from the
business group field 1102 and the group department field 1104, which is a second
level of hierarchical structure based on the corporate or geographical structure of the
cedent, and selects a previously created business opportunity from the business
opportunity field 1106. If the reinsurance officer wants to edit or copy an existing
proposal/program, the reinsurance officer can select the desired proposal/program
from proposal/program field 1108. But, for this example, the reinsurance officer is
creating a new proposal, and therefore clicks on the "Create new Proposal/Program"
button 1110.
[00173] In response, the system displays the window 1112 shown in Figure 1 IB.
Here, the reinsurance officer enters header information for the new proposal/program,
including, for example, the name of the proposal/program, the line of business, the
sub line of business, the type of reinsurance, the treaty type, the geographical scope of
risk, the perils, the currency, and the start and end date of coverage.
[00174] After defining the program through window 1112, the system presents another
"Prepare Submission" screen 1114 through which the reinsurance officer can enter
program structure details, as shown in Figure 11C. These details can include
documents, which can be attached to the program. For example, the reinsurance
officer can click on document link 1116 to add documents to the program, as
described above for document publishing (with reference to steps 404L and 404R, and
Figures 9C-9E). In addition, the reinsurance officer can click on layer data link 1118
to edit layer data (in the case of non-proportional reinsurance) or option data (in the
case of proportional reinsurance).
[00175] If the reinsurance officer clicks on layer data link 1118, the system responds
by displaying layer and option data screen 1120, as shown in Figure 1 ID. Through screen 1120, the reinsurance officer can enter layer and structure data related to the treaty, such as line of business, sub line of business, treaty type, cedent treaty number, currency, geographical scope of risk, perils, cover, deductible, GNPI, written/earned, AAD, AAL, percent ceded, premium type, EPI, and ROL.
[00176] As part of step 500, the system also provides the reinsurance officer with the
ability to copy entire programs or structures within a program. The options available
in copying data within an existing program depend on the treaty type (i.e., non-
proportional and proportional). Figure 1 IE illustrates a screen 1122 through which
the reinsurance officer can copy data in non-proportional programs. For a non-
proportional program, data can be copied at a number of different levels. By clicking
on the program option link 1124, the layer number link 1126, or the layer option link
1128, the treaty is copied at either the program option, layer, or layer option,
respectively.
[00177] For a proportional program, in this embodiment, the existing structure can be
copied at only one program option level. Therefore, in Figure 1 IE, the reinsurance
officer clicks on the program option 1124 to copy data at the program option level.
[00178] Also as part of step 500, the system provides the reinsurance officer with the
ability to insert reinstatement data to a particular non-proportional treaty. The
reinsurance officer activates this function by clicking on the update reinstatement icon
1130 in screen 1122 of Figure 1 IE. In response, as shown in Figure 1 IF, the system
displays a reinstatement data page 1132 through which the reinsurance officer can
insert reinstatement data, including, for example, whether or not there is a limit on the
number of reinstatements per treaty year in any given year (field 1134), whether the
reinstatement is free or payable (field 1136), the number of times (reinstatements) per
any one treaty year reinstatement is free or payable (field 1138), the rate of the
reinstatement premium in relation to the original premium (field 1140), and whether
the premium is "capita" (linked to the ratio between the loss suffered divided by the
cover), is "temporis" (linked to the ratio of time left on the treaty divided by the
number of days a year), or both capita and temporis (linked to both the ratio of time
and amount in relation to the original premium) (field 1142).
[00179] After preparing the proposed renewal program, the reinsurance officer is ready
to send it for review to one or more profit center managers, and eventually to a lead reinsurance officer. Figure 11G illustrates an exemplary screen through which the reinsurance officer selects the reviewing profit center manager(s) and lead reinsurance officer. As shown, the reinsurance officer selects the lead reinsurance officer in field 1144, selects the profit center managers) in field 1146, and identifies the date by which the profit center manager(s) must review the program in field 1148. To send
the program and start the review process, the reinsurance officer clicks on "Start
process" button 1150.
[00180] Returning to Figure 5, after the reinsurance officer has defined the structure
proposals, has prepared the reinsurance documentation, and has sent the material to
the profit center manager, in step 502, the profit center manager reviews the proposed
program. This review marks the beginning of step 303 of the reinsurance placement
process shown in Figure 3, i.e., the validation of proposed submissions. Step 303
coincides with stage 318 (prepare request for quotation) of cedent interface 312, and
with phase 1 of the overall reinsurance process.
[00181] In step 502, the profit center manager reviews the structured data and
associated documents of the proposed program. The profit center manager is
prompted to provide feedback and any additional information that is relevant to the
proposed reinsurance program. Optionally, as mentioned above, the reinsurance
officer may request feedback from multiple profit center managers. Typically, the
number of profit center managers reviewing the proposed program in step 502 would
depend on the scope of the reinsurance program.
[00182] After reviewing the proposed renewal program, if the profit center manager
determines that modifications are needed, then, in step 504, the profit center manager
conveys the required modifications (as unstructured data) to the reinsurance officer,
who then makes the necessary changes to the renewal program (to both unstructured
and structured data). The reinsurance officer then proceeds by creating a draft
renewal program in step 506.
[00183] If, in step 502, the profit center manager accepts the proposed program
without modification, then the profit center manager relates this acceptance to the
reinsurance officer and the reinsurance officer proceeds, without modifying the
program, to step 506 for the creation of a draft renewal program.
[00184] In step 506, in creating the draft renewal program, the reinsurance officer
creates and attaches additional common documentation, such as,slips and treaty
presentations. The reinsurance officer then forwards the renewal program to the lead
reinsurance officer for review.
[00185] In step 508, the lead reinsurance officer reviews the renewal program and its
associated documentation for completeness and quality, provides comments and/or approval as appropriate, and returns the program and comments (if applicable) to the
reinsurance officer. The comments can be either in a structured or unstructured
format.
[00186] In step 510, based on the feedback from the lead reinsurance officer, the
reinsurance officer modifies and supplements the documentation of the reinsurance
program, and flags the program as being ready for release. The modifications can
involve either structured or unstructured data.
[00187] The process of steps 500 through 510 can repeat such that several finalized
programs are available at the conclusion of step 510. Or, optionally, each step can be
performed on multiple programs so that several finalized programs are available at the
conclusion of step 510.
[00188] The completion of step 510 marks the end of the validation of the proposed
renewal program (step 303 of Figure 3), as well as the end of phase 1 of the overall
reinsurance process (see Figures 1 and 3).
[00189] Phase 2. Steps 304-305
[00190] Returning to Figure 3, after validating the proposed renewal program(s) in step
303, the reinsurance placement process continues in step 304 with the dispatch of a
renewal package to reinsurers. Step 304 marks the beginning of phase 2 of the overall
reinsurance process, in which the cedent dispatches the renewal package to the
reinsurers and, in response, the reinsurers dispatch quotes to the cedent. Step 304 also
coincides with stage 318 (prepare request for quotation) of cedent interface 312.
[00191] Referring to Figure 5, after finalizing the renewal program(s) in step 510, the
reinsurance officer creates a request for quotation dispatch in step 512. Specifically,
the reinsurance officer selects from the pool of finalized programs eligible to be
selectively included in the request for quotation and determines to which
reinsurers/brokers each reinsurance program should be released. The request for
quotation dispatch may therefore contain multiple reinsurance programs, and the
cedent may request the reinsurers/brokers to quote the same set or different sets of
programs. Optionally, releases to brokers may be in the form of a broker/reinsurer
pair, in which case the broker is expected to return a quotation specific to the reinsurer
named.
[00192] Figures 12A-12E illustrate a series of exemplary graphical user interfaces
through which a reinsurance officer creates a request for quotation dispatch in step 512, using structured data fields. The dispatch process enables the reinsurance officer
to select individually or en masse the programs to be sent to the reinsurers/brokers.
Figure 12A illustrates an exemplary program selection screen 1200 through which the
reinsurance officer identifies all of the programs to be dispatched. As shown, the
reinsurance officer can locate desired programs by using checkboxes 1202 to filter the
programs by organization unit, business opportunity, line of business, or type. The
resulting programs for this filter are listed in data field 1204, and can be selected by
highlighting their entries in field 1204 and clicking the "Add to Selection" button
1206. The reinsurance officer can also locate desired programs by filtering the
programs by business opportunity only. In this case, the reinsurance officer specifies,
a business opportunity in field 1208, highlights a program listed in field 1210, and
clicks on the "Add to Selection" button 1212.
[00193] The selected programs are listed under heading 1214. After the reinsurance
officer has selected all desired programs, the reinsurance officer clicks on the "Select
Recipient(s)" button 1216 to continue with the dispatch process.
[001941 Figure 12B illustrates an exemplary recipient selection screen 1218 through
which the reinsurance officer selects the reinsurers/brokers that are to receive
programs. As shown, screen 1218 provides a preferred reinsurer area 1220 from
which the reinsurance officer can select preferred (e.g., often used) reinsurers simply
by checking a box. Screen 1220 also provides an "other reinsurer" list 1222, a broker
list 1224, and a broker/reinsurer pair list 1226 from which the reinsurance officer can
select additional recipients of the programs. Screen 1218 lists the selected reinsurers
under heading 1228. To return to program selection screen 1200, the reinsurance
officer can click on the "Select Programs" button 1230. To proceed with the dispatch
process and select which programs are to go to which reinsurers/brokers, the
reinsurance officer clicks on the "Go to Create Dispatch" button 1232.
[00195] Figure 12C illustrates an exemplary program-recipient matrix screen 1234
through which the reinsurance officer can map the selected programs to the selected reinsurer recipients. As shown, the reinsurance officer can specify a title for the dispatch in title field 1236, assign a lead reinsurance officer to review the dispatch in field 1238, select a desired completion date in field 1240, and include comments to accompany the dispatch in field 1242. Screen 1234 provides a matrix 1244 listing programs on one side and recipient reinsurers on the other. For each program, the reinsurance officer checks checkboxes 1246 to select the reinsurers/brokers that are to
receive the program. After the reinsurance officer has matched selected programs to
selected reinsurer recipients, the reinsurance officer starts the dispatch by clicking the
"Dispatch Programs" button 1248. In response, the system sends an e-mail
notification to the lead reinsurance officer that was specified in field 1236 of Figure
12C. The notification informs the lead reinsurance officer that she has a dispatch to
review. Although Figure 12C only shows one program, it should be understood that
matrix 1244 could and would, in most instances, include multiple programs.
[00196] As shown in Figures 12C, a significant benefit of the present invention is the
tracking function provided by matrix 1244. According to prior art methods, cedents
dispatch renewal packages by mail or e-mail and lack any systematic authority check
for releasing only approved programs and (later) monitoring which reinsurers have
received which programs. For example, to determine the status of a dispatched
renewal package, a cedent using these conventional methods might have to search
haphazardly through sent e-mails. With the present invention, however, the
dispatches are easily assigned (as in matrix 1244) and then later easily retrieved for
review (e.g., through a daily agenda screen or a quotation comparison screen,
discussed below).
[00197] Returning to Figure 5, after the reinsurance officer creates the dispatch and
makes it available for review, in step 514, the lead reinsurance officer reviews the
selections made by the reinsurance officer and modifies them, if necessary. The
modifications can involve structured data. After approving of the original or modified
dispatch, the lead reinsurance officer releases the dispatch in step 516. In response,
the system electronically forwards requests for quotation to the selected
reinsurers/brokers in step 518. For example, the system forwards an e-mail
notification to a global client officer of a reinsurer with a notification of intent and a
link to the file server storing the data (structured or unstructured).
[00198] Figure 12D illustrates an exemplary dispatch screen 1250, which prompts the
lead reinsurance officer to review a newly created dispatch. As shown, screen 1250 provides a response area 1252 in which the lead reinsurance officer can specify a response option, a response due date, and response comments. The lead reinsurance officer can review the matrix 1254 prepared by the reinsurance officer and can review a program's structure by clicking on its name listed in the matrix 1254. By clicking the "Edit Dispatch" button 1256, the lead reinsurance officer can edit the dispatch to
change the recipients or the list of programs being dispatched. Once the dispatch is
acceptable, the lead reinsurance officer clicks the "Send Dispatch" button 1258,
which causes the system to send e-mail notifications to each of the reinsurer or broker
recipients, prompting them to download their request for quotation files.
[00199] Figure 12E illustrates an exemplary e-mail notification to a reinsurer. The e-
mail includes a link 1260 through which to download the request for quotation
(preferably also requiring a user name and password for security). Once downloaded,
the reinsurer can access the spreadsheet (structured) containing the cedent's program
structure and any attached documentation (unstructured). The reinsurer would then
enter quotation information in the appropriate fields, save the file, and return the file
to the cedent as an attachment to an e-mail (described below in reference to the
reinsurer's quotation step 305).
[00200] Referring to Figure 5, an alternative dispatch process occurs if, in step 512, the
reinsurance officer does not specify a lead reinsurance officer to review the dispatch
(in field 1236 of Figure 12C). In this case, when the reinsurance officer starts the
dispatch by clicking the "Dispatch Programs" button 1248 (Figure 12C), the dispatch
process proceeds directly to step 518 to send e-mail notifications to the selected
reinsurers/brokers. The dash lines connecting steps 512 and 518 in Figure 5 indicate
this alternative process.
[00201] In an alternative embodiment of the present invention, before the request for
quotation is dispatched to a group of reinsurers, the cedent initially presents the
dispatch to a selected reinsurer (or broker) in what is referred to herein as a
consultation dispatch. This consultation dispatch would involve the same steps
described herein for a dispatch to a group of reinsurers, but would only involve the
selected reinsurer (or broker). The intent of the consultation dispatch is to obtain
initial feedback on the reinsurance program and to make any necessary adjustments
before distributing the program to a large group of reinsurers.
[00202] The conclusion of step 518 marks the end of step 304 of Figure 3 (dispatch to
reinsurers), as well as the end of stage 318 (prepare request for quotation) of the
cedent interface 312.
[00203] Referring to Figure 3, after the renewal package has been dispatched to the
reinsurers, the reinsurance placement process continues in step 305 with the reinsurers
providing quotations. Step 305 also marks the beginning of quotation stage 324 of reinsurer interface 314.
[00204] Figure 6 outlines an exemplary method for completing step 305. As shown,
the method begins in step 518 with the reinsurer receiving a notification requesting a quotation. The notification could be, for example, an e-mail notification with a link to reinsurer interface 314 and to structured data stored on host server 201 (Figure 2). The reinsurer then accesses the renewal package using reinsurer interface 314, at stage 324. Through reinsurer interface 314, the reinsurer connects to file transfer server 202 and retrieves, for example, spreadsheet files (structured data) and documentation attachments (unstructured data).
[00205] In a representative embodiment of the present invention, reinsurer interface
314 supports two business process models: centralized and decentralized. The process flows for these models are the same, except for the roles used in executing the steps. Table 2 below outlines the differences between the centralized and decentralized models.
Table 2 - Centralized versus Decentralized
(Table Removed)
[00206] As shown in Table 2, a global client office only exists in the centralized
model. For the decentralized model, either an underwriter or a local client manager is able to set up the proposal through reinsurer interface 314. The initiator is the person who sets up the proposal and assigns the performers. The initiator is responsible for re-assigning the proposal if a performer declines to do the work.
[00207] Global client manager is part of the workflow in the centralized model. In the
decentralized model, the global client manager is not part of the workflow, but is instead assigned as an observer.
[00208] For clarity, the descriptions herein of the stages 324,326, and 328 of reinsurer
interface 314 trace the reinsurer's workflow according to the centralized model. It
should be understood, however, that the descriptions also apply to the decentralized
model, but with the role substitutions and differences noted above in reference to
Table 2.
[00209] Referring to Figure 6, in step 518, the global client office receives all of the
treaty renewal information prepared by the cedent. Preferably, the treaty data is
electronically transmitted to the reinsurer. For example, the global client office
receives an e-mail reporting that a request for quotation is pending, as shown in
Figure 12E. The global client office then accesses a compressed reinsurance package
stored on file transfer server 202 (Figures 2A and 2B), using a unique user name and
password. The global client office downloads the package and extracts the files. The
files include, for example, any documents that the cedent chose to attach (e.g., treaty
presentations, slips, loss statistics, and underwriting policy descriptions), as well as a
copy of the program's structured data in spreadsheet format, with data fields in which
to provide quotes.
[00210] Figures 13A-13D illustrate a series of exemplary graphical user interface
screens through which the reinsurer provides a quotation for the renewal package
proposed by the cedent. After receiving the e-mail notification of Figure 12E, the
reinsurer clicks on the link 1260 embedded in the e-mail to download the request for
quotation. As shown in Figure 13A, link 1260 launches a file download application,
which locates the reinsurer's files on the file transfer server 202. The reinsurer
specifies a location at which to save the files on the hard drive of reinsurer computer
208. Preferably, file transfer server 202 requires the reinsurer to furnish its unique
user name and password as a condition to connect to file transfer server 202 and
download the files.
[00211] Figures 13B-13D illustrate the contents of an exemplary downloaded file. As
shown, the file includes an Excel workbook having multiple worksheets. The first sheet 1300, as shown in Figure 13B, provides the reinsurer with the background on the request for quotation, instructions for submitting a quotation, and contact information of the cedent. These exemplary instructions explain that the workbook is a request for quotation on one or more reinsurance programs, and that the workbook contains a "non-proportional" tab and a "proportional" tab. The non-proportional tab
contains non-proportional programs (if any) to be quoted. The proportional tab
contains proportional programs (if any) to be quoted. The instructions ask the
reinsurer to review the different worksheets of the workbook along with any
documents that may have been forwarded with the workbook. The instructions ask
the reinsurer to provide its quotation in designated fields {e.g., shaded yellow). The
instructions also explain how to propose alternatives, how to refuse to quote, how to
return the document to the cedent when the quotation is complete, when the quotation
is due, and who to contact with questions. This first sheet 1300 of the workbook can
also include general comments related to completing the quotation.
[00212] Figure 13C illustrates an exemplary worksheet 1302 for entering a quotation
for non-proportional treaties. Although Figure 13C shows only a portion of
worksheet 1302, which contains a few selected fields, one of ordinary skill in the art
would appreciate that worksheet 1302 could contain many other fields as dictated, for
example, by the cedent's particular request for quotation. As shown, the left portion
1304 of the spreadsheet lists the structured treaty data (e.g., dates, layering numbers,
lines of business, deductibles, reinstatements, and suggested rates) describing the
treaties, as entered previously by the cedent. Preferably, the data fields in the left
portion 1304 of the spreadsheet are protected and cannot be overwritten by the
reinsurer. The right portion 1306 of the spreadsheet provides the data fields in which
the reinsurer enters a quotation. These fields include, for example, rate, share,
management expenses, premiums, new premiums, and deposit premiums. The lower
portion 1308 of the spreadsheet provides data fields in which the reinsurer can
propose alternatives to the programs presented by the cedent. For example, the
reinsurer may suggest a different way to structure a program, such as differently
organized layers.
[00213] Figure 13D illustrates an exemplary worksheet 1310 with quotations entered
by the reinsurer. Although Figures 13C and 13D illustrate non-proportional
worksheets, the proportional worksheets would look substantially similar and would
operate in substantially the same manner.
[00214] Although the spreadsheets greatly increase the efficiency of dispatching
requests for proposals, in some instances, electronic transmission of the requests may not be possible. For example, although a reinsurer may receive the electronic transmission of the requests, the reinsurer may not have an internal electronic system
for the placement of renewal business or may not be interfaced into the reinsurer
internal system. In this case, step 518 further involves the reinsurer's registering the
business described in the request for quotation by entering the treaty data and
structure information into reinsurer interface 314. Reinsurer interface 314 enables a
global client office to create and view a business opportunity and program in the
centralized process. (For the decentralized process, an underwriter, local client
manager, or global client manager creates the business opportunity and program.)
The global client office enters the name of the business opportunity, the priority of the
opportunity, the profit center code, the program name, the program number client, and
other program data (e.g., line of business, inception date, geographical scope, brokers,
peril inclusions/exclusions, and geographical inclusions/exclusions).
100215] In response, reinsurer interface 314 displays an overview of the program,
which shows non-proportional and proportional elements available for the structured
data of the program. Through reinsurer interface 314, the global client office enters
the treaty data the non-proportional and proportional elements (in the centralized
process). (In the decentralized process, the underwriter or local client manager enters
the treaty data.)
[00216] At this point in the process, the reinsurer has the request for quotation
information from the cedent, either contained in a spreadsheet downloaded (perhaps,
with other unstructured documentation) from file transfer server 202 or entered
manually into reinsurer interface 314. The reinsurer is therefore ready to review and
quote on the renewal package. The following steps 600-624 of Figure 6 illustrate an
exemplary process through which a reinsurer reviews and quotes on the renewal
package. As one of ordinary skill in the art would appreciate, the individual practices
of reinsurers may vary from the generic process shown in steps 600-624.
[00217] Referring to Figure 6, having obtained the treaty data in step 518 (either
electronically via an e-mail and link, or entered manually into reinsurer interface 314), the global client office, in step 601B, initiates the quotation stage 324 business process by performing ah initial review of the treaty renewal information received from the cedent. If the data provided by the cedent is insufficient, such that the reinsurer is unable to provide a quote, then, in step 601 A, the global client office requests more information from the cedent. The cedent then addresses the inadequacies and, returning to step 518, provides the reinsurer with a revised request
for quotation. This initial review process of steps 518,600, and 601A repeats until
the reinsurer has the information necessary to provide a quote.
[00218] Assuming the reinsurer receives adequate data, in step 601B, the members of
the global client office set up the proposal internally to their organization (perhaps,
through reinsurer interface 314) and assign the people responsible for completing the
work on each program. The global client office assigns an underwriter, a local client
manager, and a global client manager. In the centralized process, the global client
office sends the program to the underwriter, local client manager, and global client
manager. In the decentralized process, the person who created the structured program
may assign the program to the underwriter and local client manager involved in the
program. The global client office can also assign observers to a program, who can
monitor the entire process and offer comments. The reinsurer can assign different
underwriters for the non-proportional and proportional elements of the program. The
reinsurer can select appropriate users for each of the roles and can assign acceptance
deadline and completion deadline dates.
[00219] Referring to Figure 6, after the quotation phase has been initiated and the
responsible persons have been assigned, in step 602, the underwriter decides whether
to agree to work on the quotation. The underwriter may decline the work if, for
example, she has been incorrectly assigned or is unavailable because of holiday or
work commitments. If the underwriter does decline the work, then the underwriter
notifies the global client office of the refusal and, returning to step 60 IB, the global
client office assigns another underwriter.
[00220] If, in step 602, the underwriter accepts the work, then, in step 604, the
underwriter reviews the program detailed in the request for quotation and produces a technical quote. The technical quote can possibly reflect the outcome of capacity allocation and can possibly include new structures. The underwriter produces the technical quote by calculating off-line and entering the appropriate values in the spreadsheet of Figures 13A-13D or in the interface provided by reinsurance interface 314. In a common scenario, the offered share and offered rate would not be entered at this point, as these values are the responsibility of the local or global client manager. As part of producing the technical quote (step 604 of Figure 6), the underwriter can also complete registration of cat capacity amounts.
[00221] After the underwriter has created and submitted the technical quote, the quote
is ready to be presented to the local client manager for review. First, however, the
local client manager must agree to review the program, as assigned by the global
client office in step 601B. Thus, in step 606, the local client manager decides whether
to accept the task of reviewing the program.
[00222] If the local client manager does not accept the work, then the global client
office is notified of the refusal and, returning to step 601B, assigns a new local client
manager. Assuming the local client manager accepts the work, then, in step 608, the
local client manager reviews the technical quote prepared by the underwriter.
[00223] After reviewing the technical quotation, in step 610, the local client manager
either accepts or rejects the quote. If the local client manager rejects the technical
quotation, then, in step 612, reinsurer interface 314 notifies the underwriter of the
rejection and gives the underwriter the opportunity to revise the technical quotation.
After the revisions are made, returning to step 608, the local client manager reviews
the revised technical quotation, and then decides whether it is acceptable in step 610.
This review process (steps 608, 610, and 612) repeats until the local client manager
accepts the technical quotation.
[00224] Once the local client manager accepts the technical quotation in step 610, then,
in step 614, the local client manager produces a market quote (e.g., offered share and
offered rate), which proposes price adjustments according to market realities. As part
of entering the offered share, the local client manager can calculate cat capacity
allocation amounts. The local client manager can also check to ensure that an
adequate budget exists, and, if not, can change the offered share to adjust the amount
of capacity being allocated.
[00225] After the local client manager has produced the market quote by entering the
offered share and offered rate, the market quote is ready for review by the global
client manager. First, however, the global client manager must agree to review the
market quote, as assigned by the global client office in step 60 IB. Thus, in step 616,
the global client manager decides whether to accept the task of reviewing the market
quote.
[00226] If the global client manager does not accept the work, then the global client
office is notified of the refusal and, returning to step 601B, assigns a new global client manager.
[00227] Assuming the global client manager accepts the work, then, in step 620, the
global client manager reviews the market quote prepared by the local client manager.
[00228] After reviewing the market quote, in step 618, the global client manager either
accepts or rejects the quote. If the global client manager rejects the quote, the global
client manager can include comments in the response, for example, to propose price
adjustments based on market realities.
[00229] If the global client manager rejects the market quote, then, in step 622,
reinsurer interface 314 notifies the local client manager of the rejection and gives the
local client manager the opportunity to revise the market quote. The local client
manager may also discuss the required changes with the global client manager.
[00230] After the revisions are made, returning to step 618, the global client manager
reviews the revised market quote, and then decides whether it is acceptable in step
620. This review process (steps 618,620, and 622) repeats until the global client
manager accepts the market quote.
[00231] Once the global client manager accepts the market quotation in step 620, then,
in step 624, the global client office returns the program quotes back to the cedent.
The program quotes include, for example, spreadsheet files (structured) and
documentation attachments (unstructured), as discussed above in reference to Figures
13A-13D.
[00232] Referring to Figure 3, the conclusion of step 624 marks the end step 305
(reinsurers quote), the end of the quotation stage 324 of reinsurer interface 314, and
the end of phase 2 (dispatch of programs and program quotes) of the overall
reinsurance placement process.
[00233] Phase 3. Steps 306-307
[00234] With the program quotes returned to the cedent, the reinsurance process
continues in step 306 with evaluation of the quotes by the cedent. The start of this
evaluation also marks the start of the evaluation and negotiation stage 320 of cedent
interface 312, and the start of evaluation and negotiation phase 3 of the overall
reinsurance placement process.
[00235] Figure 7A outlines an exemplary method for completing the evaluation step
306 (as well as the cedent-portion of negotiation step 307 of Figure 3). As shown, after the cedent receives the reinsurer quotes in step 624, the reinsurance officer of the cedent evaluates the quotes in step 700. Specifically, the reinsurance officer imports
the quotes (structured data) into cedent interface 312, which provides special screens
that summarize the reinsurance quotations returned by the reinsurers and provide
access to the details of each quotation. Optionally, the evaluation of step 700 may
involve correspondence between the cedent and the reinsurers/brokers.
[00236] Figures 14,15,16A, and 16B illustrate an exemplary series of screens through
which the cedent receives quotations returned by reinsurers. Typically, a reinsurer
would return the quotation by e-mail and the cedent would detach the quotation file
from the e-mail and import it to host server 201 (as described in reference to Figure
2B). The reinsurance officer of the cedent would review the file to ensure that it is
intact and that the quotation makes sense. The reinsurance officer would then process
the quotation using reinsurer interface 312 as shown in Figures 14,15,16A, and 16B.
[00237] As shown in Figure 14, a first screen 1600 shows, on a separate line, each
reinsurer that has been selected as a dispatch recipient of the program. To view a
quotation, the reinsurance officer clicks on link 1602. As shown in Figure 15, another
screen 1604 enables the reinsurance officer to upload the quotation file using the
"Add File" button 1606. Alternatively, the reinsurance officer can click the "Enter
Quotation Manually" button 1608 to enter the quotation manually. This feature is
particularly useful if the reinsurer has returned a quotation by telephone or facsimile,
rather than completing the quotation spreadsheet, or has proposed changes or
additions to the program structure.
[00238] After locating a file and clicking button 1606 or entering the quotation
manually using button 1608, the reinsurer interface 312 displays screen 1610, as
shown in Figure 16A. Using the buttons in area 1612, the reinsurance officer can then
view the file, remove the file (if, for example, the wrong file was selected), or upload
the file (i.e., process file). Then, as shown in screen 1614 of Figure 16B, the
reinsurance officer selects "Quotation complete" in field 1616 and clicks on the "Go"
button 1618.
[00239] In some cases, the cedent may not receive a reinsurer's quotation
electronically and must therefore manually enter the quotation into cedent interface 312. For example, some reinsurers may insist on the conventional methods of mailing or faxing quotations to the cedent. Figures 17A-17C illustrate this scenario in which quotations are entered manually. Figure 17A shows the status page for a program that has been dispatched. As shown by box 1720, the cedent has not received a quotation
from the listed reinsurer for this program. Assuming that the cedent then receives the
quotation by fax, then the cedent must manually enter the quotation. Thus, the cedent
clicks on the "Enter Quotation Manually" button 1722 (which corresponds to button
1608 of Figure 15).
[00240] In response, as shown in Figure 17B, cedent interface 312 displays an enter
quotation data page 1724 for the particular reinsurer, which lists the program
information and the proposed layers and options. To enter the reinsurer's quotation
for a particular option/layer, the cedent clicks on icon 1726. In response, as shown in
Figure 17C, cedent interface 312 displays an enter quotation details page 1728 in
which the cedent can enter the reinsurer's quoted layer details, including the
reinsurer's offered rate and share.
[00241] Figures 18A-18C illustrate exemplary screens 1800,1802, and 1803,
respectively, through which a reinsurance officer can compare quotations to complete
the evaluation of step 700. As shown in Figure 18A, screen 1800 allows the
reinsurance officer to define for which of the programs the reinsurance officer would
like to view quotations. The reinsurance officer can search for programs by business
opportunity or dispatch number. After locating and selecting a program, the
reinsurance officer clicks on the "Compare Quotes" button 1804 to view all of the
quotations received for the selected program.
[00242] In response, as shown in Figure 18B, cedent interface 312 displays screen
1802, which indicates, in area 1806, the program and the rate and share provided by
the reinsurers/brokers who have been requested to provide a quotation. Area 1806
shows all reinsurers that were initially set as a dispatch recipient. An entry reading
"open" indicates a reinsurer that has not returned a quotation. An entry reading "nil"
indicates a reinsurer that has declined to quote. The reinsurance officer can click on
the program name 1808 to review the details of the quotation.
[00243] Figure 18C illustrates another example of a quotation comparison screen 1803.
This example shows three programs, each distributed to multiple reinsurers. The matrix of screen 1803 helps the cedent compare all reinsurer offers in a single, convenient view and serves as a valuable tracking tool in managing the dispatch of the various requests for proposals for multiple programs and multiple reinsurers. Conventional methods of completing this step have traditionally involved mailing or e-mailing requests for quotations, which often leads to uncertainties about which
requests and which versions of the requests have been sent to which reinsurers. The
tracking advantages of the present invention eliminate this confusion.
[00244] After the reinsurance officer of the cedent has finished the evaluation, the
cedent is ready to set a final price and negotiate written shares with selected
reinsurers. Thus, the conclusion of step 700 marks the end of the evaluation step 306
of Figure 3. The remaining steps 307 and 308 of the overall reinsurance placement
process involve negotiation and collaboration between the cedent and reinsurers.
During this negotiation and collaboration, the cedent works through cedent interface
312 in the evaluation and negotiation stage 320 and the placement stage 322, while
the reinsurers work through reinsurer interface 314 in the negotiation stage 326 and
the signing stage 328.
100245] Figures 7A and 7B outline an exemplary method for completing negotiation
step 307 of Figure 3. Figure 7A illustrates the steps completed by the cedent in
negotiating with the reinsurer. Figure 7B illustrates the steps completed by the
reinsurer in negotiating with the cedent. Starting with Figure 7A, after the cedent
reinsurance officer has evaluated the reinsurer quotes, in step 702, the cedent
reinsurance officer establishes the final structure of the program (through structured
data input). Specifically, the cedent reinsurance officer determines which of the
program/layer options will be adopted, in essence, solidifying the "structure" of the
reinsurance program, which up until this point, may have consisted of multiple
mutually exclusive options. The cedent reinsurance officer also enters the common
price the cedent will pay reinsurers for the chosen covers. The cedent reinsurance
officer also determines which reinsurers and brokers will be requested to provide a
written share quotation. In the case of a broker, the cedent reinsurance officer can
request that the broker provide a written share quotation for a specific reinsurer.
Alternatively, the cedent reinsurance officer can request the broker to contact and
quote from a pool of "approved" reinsurers based on the cedent's standards and
policies for reinsurer creditworthiness.
[00246] Figure 18B illustrates a screen 1802 through which the reinsurance officer can
establish the final structure of the program (step 702). As shown, to select program and layer options to be a part of the final structure, the cedent reinsurance officer selects checkbox 1810. As part of a plausibility check, cedent interface 312 provides a warning message if the cedent reinsurance officer selects an incorrect mix of
program/layer options. After selecting the final structure, the cedent reinsurance
officer clicks on the "Proceed to Negotiation Phase" button 1812.
[00247] Returning to Figure 7A, once the final structure is set, in step 704, the lead
reinsurance officer reviews the program structure, final price, and reinsurer/broker
selections made by the cedent reinsurance officer. The lead reinsurance officer enters
modifications if necessary (as structured data).
[00248] Figure 19 illustrates an exemplary negotiation screen 1900 through which the
lead reinsurance officer can enter final net and gross rates in data fields 1902,
designate preferred participants in the negotiation through link 1904, select a leader in
fields 1906 (i.e., the reinsurer(s) with the largest share of the treaty), and suggest a
proposed written share to the reinsurer/broker in fields 1908.
[00249] Referring to Figure 7A, in step 706, the lead reinsurance officer requests a
written share from the selected reinsurers/brokers (by clicking on the "Start Process"
button 1910 of Figure 19). The lead reinsurance officer releases a request for written
share dispatch using the same technical mechanisms/processes described above for
dispatch of requests for quotation. For example, the request for written share dispatch
may involve multiple reinsurance programs, all of whose documents (unstructured)
together with automatically prepared quote spreadsheet (structured) are compressed
into a package file for the specified reinsurer or broker.
[00250] After the lead reinsurance officer releases the request for written share, in step
708, the request is sent to the participant reinsurers. The request is, for example, an e-
mail asking a reinsurer to download a reinsurance package. The package can include
attached documents (unstructured) and formatted quote spreadsheet files (structured)
in which to specify written shares. This dispatch is performed in the same manner as
described above in reference to dispatching requests for quotation.
[00251] Figures 20A-20C illustrate the contents of an exemplary downloaded file for
the request for written share. The file includes an Excel workbook having multiple worksheets. The first sheet 2000, as shown in Figure 20A, provides the reinsurer with the background on the request for written share, instructions for submitting a written share, and contact information of the cedent. These exemplary instructions explain that the workbook is a request for written share on one or more reinsurance programs, and that the workbook contains a "non-proportional" tab and a "proportional" tab. The non-proportional tab contains non-proportional programs (if any) that require
written shares. The proportional tab contains proportional programs (if any) that
require written shares. The instructions ask the reinsurer to review the different
worksheets of the workbook along with any documents that may have been forwarded
with the workbook. The instructions ask the reinsurer to provide its written share in
designated fields (e.g., shaded yellow). The instructions also explain how to refuse to
participate, how to return the document to the cedent when the written share is
complete, when the written share is due, and who to contact with questions. This first
sheet 2000 of the workbook can also include general comments related to completing
the written share.
[00252] Figure 20B illustrates an exemplary worksheet 2002 for entering a written
share for non-proportional treaties. The left portion 2004 of the spreadsheet lists the
structured treaty data (e.g., dates, layering numbers, lines of business, deductibles,
reinstatements, and suggested rates) describing the treaties, as entered previously by
the cedent. The data fields in the left portion 2004 of the spreadsheet are protected
and cannot be overwritten by the reinsurer. The right portion 2006 of the spreadsheet
provides the data fields in which the reinsurer enters a written share. Similar to the
non-proportional worksheet 2002, Figure 20C illustrates an exemplary worksheet
2008 for entering a written share for proportional treaties.
[00253] As shown in Figure 7B, after the reinsurer receives the request for written
share, in step 710, the global client office of the reinsurer determines whether the
program structure has change significantly in comparison to the One that was
originally quoted. The global client office also marks the options that will be the
subject of negotiation and enters the final rates for each treaty.
[00254] If, in step 710, the structure has not changed significantly, then the process
skips ahead to step 712A, at which point the global client office is ready to request the production of a written share by the local client manager (discussed below). If, however, the structure has changed significantly, then, in step 712B, the global client office assigns an underwriter, global client manager, and local client manager to work on the written share, and requests that the underwriter provide a new written share quotation. As in the quotation phase 2 (see step 602 of Figure 6), the underwriter decides whether to agree to work on the quotation. If the underwriter declines the work, then the underwriter notifies the global client office of the refusal and, returning to step 712B, the global client office assigns another underwriter. Instead of
reassigning the work, the global client office could insist that the originally assigned
underwriter do the work.
[00255] If the underwriter accepts the work, then, in step 716, the underwriter
produces a new technical quote.
[00256] After the new technical quote is complete (or after the global client office has
determined that the structure has not changed significantly in step 710), in step 712A,
the global client office requests a written share from the local client manager. But,
before the local client manager produces the written share, the local client manager
must accept the work as assigned by the global client office in step 712B. Thus, in
step 718, the global client manager decides whether to accept the task of preparing a
written share.
[00257] If the global client manager does not accept the work, then the global client
office is notified of the refusal and, returning to step 712B, assigns a new global client
manager. Instead of reassigning the work, the global client office could insist that the
originally assigned global client manager do the work.
[00258] Assuming the global client manager accepts the work, then, in step 720, the
global client manager enters the written share (structured data) based on the cedent's
final rate. In deciding on the written share, the local client manager may consult with
the cedent. Additionally, the local client manager can discuss the treaty with the
underwriter who provided the original quotation.
[00259] After the local client manager produces the written share, in step 722, the
global client manager reviews the written share. In step 724, the global client
manager either accepts the written share or rejects the written share and requests an
amendment.
[00260] If the global client manager rejects the written share, then, in step 726,
reinsurer interface 314 notifies the local client manager of the rejection and gives the
local client manager the opportunity to revise the written share.
[00261] After the revisions are made, returning to step 722, the global client manager
reviews the revised written share, and then decides whether it is acceptable in step
724. This review process (steps 722, 724, and 726) repeats until the global client
manager accepts the written share.
[00262] Once the global client manager accepts the written share in step 726, then, in
step 728, the global client office returns the written share for each treaty back to the
cedent. The written share program quotes can include, for example, spreadsheet files
(structured) and documentation attachments (unstructured).
[00263] Figure 7B shows a centralized model in which the global client office is
responsible for entering the final program structure, marking the program/layer
options that are being negotiated, and entering the final rates for each treaty. In the
decentralized model, instead of the global client office (which does not exist in the
decentralized model), the local client manager would perform these tasks.
[00264] Returning to Figure 7A, after the reinsurer returns a written share to the cedent
in step 728, the reinsurance officer of the cedent reviews the written share and decides
if a change is needed, in step 730. The reinsurance officer loads the written share as
structured data into host server 201 and compares values in special reports and
screens provided by cedent interface 312.
[00265] If the reinsurance officer of the cedent does not receive the written share
electronically {e.g., by fax or mail), then the reinsurance officer must manually enter
the written share. Figures 20D and 20E illustrate exemplary screens 2010 and 2012,
respectively, through which the reinsurance officer manually enters written shares.
Figure 20D shows the status page for a written share that has been dispatched. As
shown by box 2014, the reinsurance officer has not received a written share from the
listed reinsurer for this program. Assuming that the reinsurance officer then receives
the written share response by telephone or facsimile, then the reinsurance officer must
manually enter the quotation. Thus, the reinsurance officer clicks on the "Enter
Written Share Manually" button 2016.
[00266] In response, as shown in Figure 20D, cedent interface 312 displays an enter
written share page 2012 for the particular reinsurer, which lists the program
information and the proposed layers and options. The reinsurance officer enters the
reinsurer's proposed share in the written share box 2018.
[00267] If, after reviewing the written shares, the reinsurance officer decides that the
structure must be amended, then, returning to step 702, the reinsurance officer selects
a new structure and/or price. The process then continues from 702 as outlined above,
but for the amended structure.
[00268] If, in step 730, the reinsurance officer accepts the written share, then,
proceeding to step 732, the agreed-on written share is ready for signing and for completing the placement of the business.
[00269] Figures 21A and 21B illustrate exemplary screens 2100 and 2102 through
which the reinsurance officer reviews and agrees on the written share from the
reinsurer in steps 730 and 732. As shown in Figure 21 A, cedent interface 312 lists the
written share in the cedent's daily agenda. After the negotiation dispatch has been
made, the daily agenda shows a record for the comparison of negotiation data and also
a single record for each reinsurer/broker to participate in the negotiation process.
[00270] Reinsurers return their negotiation worksheets with their written shares to the
reinsurance officer as a file attached to an e-mail. The reinsurance officer saves the
file to the reinsurance officer's hard drive. The file can then be uploaded into cedent
interface 312. Alternatively, the reinsurance officer can manually enter the written
share into cedent interface 312.
[00271] In response to a click of the written share link 2106 in Figure 21 A, cedent
interface displays screen 2102 of Figure 21B. In screen 2102, the reinsurance officer
agrees to the written share by selecting the "Quotation complete" option in response
field 2108 and clicking the "Go" button 2110. The written share checkbox 2112
indicates that the negotiation file from the reinsurer was processed successfully and
that there were no rows that were missing written share data.
[00272] In response to a selection of "quotation complete," cedent interface 312
updates the reinsurance officer's daily agenda as shown in Figure 21A. Specifically,
the reinsurer's record is completed and removed from the daily agenda, leaving only
the "Sign Share" record.
[00273] The completion of step 732 of Figure 7 A marks the end of the negotiation step
307 of Figure 3, as well as the end of the evaluation and negotiation phase 3 of the
overall reinsurance placement process (see Figures 1 and 3). The conclusion of step
307 also coincides with the conclusion of the evaluation and negotiation stage 320 of
cedent interface 312 and the negotiation stage 326 of reinsurer interface 314.
[00274] Phase 4. Step 304
[00275] Referring to Figure 3, after negotiating the program and written share in step
307, the reinsurance placement process ends in step 308 by completing the placement
of the business. Step 308 coincides with the placement stage 322 of cedent interface
312 and the signing stage 328 of reinsurer interface 314.
[00276] Figure 8 outlines an exemplary method for completing the business placement
step 308. As shown, the business placement step 308 involves the cedent (the lead
reinsurance officer and the reinsurance officer) and the reinsurer, as indicated by the
horizontal rows of Figure 8 labeled LRO, RO, and REINSURER. During this step,
the cedent interacts through the placement stage 322 of cedent interface 312, and the
reinsurer interacts through the signing stage 328 of reinsurer interface 314.
[00277] After the written share is agreed on in step 732, the reinsurance officer of the
cedent assigns the final shares in step 800. The reinsurance officer assigns the final
shares to each participant using the same technical mechanism/processes described
above for requests for quotation and requests for written share. The reinsurance
officer captures the signed shares as structured data and attaches documentation as
unstructured data.
[00278] Once the shares have been assigned, in step 802, the lead reinsurance officer
reviews the final shares and makes changes if necessary. The lead reinsurance officer
then approves the final shares and dispatches them to the reinsurer as structured data.
The dispatch of the final shares involves the same technical mechanism/processes
described above for requests for quotation and requests for written share.
[00279] Figures 22A and 22B illustrate exemplary cedent interface screens 2200 and
2202 for assigning final shares. As shown in Figure 22A, cedent interface 312 lists in
the cedent's daily agenda the task of signing the final share. Li response to a click of
the "Sign Share" link 2201 in Figure 22A, cedent interface displays screen 2202 of
Figure 22B. In screen 2202, the cedent enters the final signed shares in the signed
share data fields 2203. The cedent selects the leader(s) using checkboxes 2204 and
clicks the "Go" button 2206 to notify the reinsurers of their final shares.
[00280] Referring to Figure 8, in step 804, the reinsurer or broker is notified of its final
share. The notification is, for example, an e-mail requesting that the reinsurer/broker
download a reinsurance package. Each participant is informed of its share. In the
centralized model, the global client office signs the final share. In the decentralized
model, the local client manager signs the final share.
[00281] Figures 23A and 23B illustrate the contents of an exemplary downloaded file
for the confirmation of final signed shares. The file includes an Excel workbook having multiple worksheets. The first sheet 2300, as shown in Figure 23 A, provides the reinsurer with an explanation of the signed share confirmation and includes contact information of the cedent. Sheet 2300 explains that the workbook is a signed share confirmation on one or more reinsurance programs, and that the workbook
contains a "non-proportional" tab and a "proportional" tab. The non-proportional tab
contains non-proportional reinsurance programs (if any). The proportional tab
contains proportional reinsurance programs (if any).
[00282] Figure 23B illustrates an exemplary worksheet 2302 for reporting the final
signed shares. The spreadsheet lists the structured treaty data (e.g., dates, layering
numbers, lines of business, deductibles, reinstatements, and suggested rates)
describing the treaties, as entered previously by the cedent. Column 2304 lists the
signed shares for each program.
[00283] In a typical case, the final share will be identical to the written share. On
occasion, however, the final share and written share may differ if, for example, the
cedent fails to achieve full take-up or a reinsurer withdraws late in the process. In this
case, the share of the withdrawn reinsurer can be divided equally among the
remaining participants. Each remaining participant would then be able to accept or
refuse the adjusted share.
[00284] Returning to Figure 8, after the participating reinsurers receive their final
shares, the reinsurance officer enters the signed business rules into the accounting
systems in step 806 and prints the contract wordings in step 808. Then, in steps 810,
812, and 814, the lead reinsurance officer, the reinsurance officer, and the reinsurers,
respectively, sign the wordings. In steps 816 and 818, both the reinsurer and the
cedent retain a signed copy of the wordings. Finally, in step 818, the business in
considered placed.
[00285] In an embodiment of the present invention, steps 806-820 occur at least
partially, and preferably completely, by electronic means. In other words, a portion or
all of steps 806-820 involves an electronic transaction between the cedent and the
reinsurers) that legally binds the parties to the treaty conditions and written shares.
In essence, host server 201 would capture the latest conditions and shares assigned by
the cedent and agreed to by the reinsurer(s), and would incorporate the corresponding
structured and unstructured data into a final binding agreement, or wording.
[00286] Using online transactional tools such as electronic signatures, electronic mail,
electronic underwriting, and digital document preparation, the cedent and reinsurers) would exchange, sign, and archive the final binding agreement, as shown in steps 808-818. Recently enacted federal laws (e.g., Electronic Signatures in Global and
National Commerce Act and the Uniform Electronic Transaction Act) give legal
weight to these electronic signatures and to electronic contracts.
[00287] The conclusion of the placement of the reinsurance business in step 818 marks
the end of step 308 and phase 4 of Figure 3, and thus marks the end of the overall
reinsurance placement process.
[00288] Although, in reference to Figure 3, the dispatches to the reinsurers are
described as a single occurrence, these dispatches could, of course, involve multiple
iterations. For example, in step 304, if the cedent dispatches a request for quotation to
a group of reinsurers, and then discovers that another reinsurer should be included in
the distribution, then, according to this embodiment of the present invention, the
cedent could return to screen 1218 of Figure 12B, select the additional reinsurer, and
re-dispatch the request to that reinsurer. As another example, after dispatching a
request for quotation, the cedent may not receive any desirable quotations, and could
then return to steps 303 and 304 (Figure 3) to revise and re-dispatch the program to
the same group of reinsurers. As another example, the negotiation step 307 can
involve multiple dispatches of requests for written share. Thus, as one of ordinary
skill in the art would appreciate, the process of Figure 3 can loop back to the dispatch
steps as required by individual circumstances.
[00289] In addition to navigating the cedent through the reinsurance placement
process, a representative embodiment of the present invention provides a cedent with
a wide variety of summary and detail reports of the data stored during and after the
process. For example, cedent interface 312 provides several reports through which
the cedent can view treaty level data, such as a report of all non-proportional or
proportional treaties, and a report of all treaties contained within a single program. As
an example, Figures 24A and 24B illustrate a program overview page 2408 and
program details 2410, respectively. Page 2408 lists a cedent's proposals in progress
and indicates the status of each, along with pertinent data such as business group,
group department, business opportunity, line of business, and treaty type. Page 2410
lists the details of a program, including the pre-quoted, quoted, and negotiated
premiums and written shares.
[00290] In addition to reinsurance process control and reporting, another embodiment
of the present invention provides large-scale data archiving functions. The archiving functions provide a valuable repository of reinsurance data and transactional history.
[00291] According to the archiving functions of the present invention, all data
(structured or unstructured), transactional information, and communications that are
generated throughout the process of Figure 3 are stored as write-protected files in one
or more database repositories. For example, a cedent's program requirements, risk
data, communications related to the program, and proposals received from reinsurers
would be stored on host server 201. The archiving function would store the cedent
files and data of dispatches to reinsurers on file transfer server 202 including requests
for quotation, submitted proposals, and communications related to the proposals. Of
course, the archiving function could store this information locally as well, for
example, on the local network or hard drive of the cedent.
[00292] The particular data that is archived depends upon the specific implementation
of the present invention, and the individual needs of the cedent. In an exemplary
implementation, the archiving function would capture key points in the process of
Figure 3, at which data, proposals, or communications are finalized. For example, an
embodiment of the present invention automatically creates an audit trail that
documents the activities of all parties involved in the provision and sign-off of risk
data and the creation and sign-off of a proposed submission (program) or a proposed
renewal package. The audit trail could include, for example, personal identifications,
times, dates, and commentaries of the respective parties.
[00293] As another example of archiving key points in the process of Figure 3,
published risk data could be archived after step 406 (Figure 4), dispatched renewal
programs could be archived after step 510 (Figure 5), and quotes could be archived as
part of step 624 (Figure 6). With regard to communications, discussion threads
between the cedent and reinsurers) are archived to provide a complete record of the
transactions. Figures 15,17A, 20D, and 21B illustrate exemplary discussion threads.
This record of communication is especially helpful during the negotiation step 307
when collaboration between the parties is likely to involve offline communications
(e.g., meetings or telephone calls). With this archiving function, the cedent can
therefore enter the substance of these offline communications to more effectively
track the reinsurance placement process.
[00294] Capitalizing on the data repository built by the archiving function, a further
aspect of this embodiment provides large-scale data editing and manipulation
functions. The editing and manipulation functions ease the cedent's task of
structuring a quotation, and include, for example, a copy program function.
[00295] The copy program function copies basic treaty data from previously entered
renewal information (in prior renewal years), and makes the data readily available for
renewal for the current year. The cedent can edit or modify the copied data as
necessary. Figures 25A-25C illustrate exemplary screens of cedent interface 312
through which a cedent can copy renewal data. As shown in Figure 25 A, to activate
the function, the cedent clicks on link 2502. Then, as shown in Figure 25B, the
cedent can enter a new program name in field 2504. The cedent can also amend the
other details shown in Figure 25B, if desired. Once finished, the cedent clicks the
"Copy" button 2506. In response, the new program is created and displayed in a
"Prepare Submission" screen as shown in Figure 25C. The cedent can modify the
details of the program as shown in Figure 25C.
[00296] A further embodiment of the present invention provides a global terminology
software tool that establishes an international standard for reinsurance placement
terminology, while also providing users with a conveniently accessible glossary. In
conventional practices, a significant impediment to the global harmonization of the
reinsurance placement business is the contrasting terminology used by different
regions of the world. Indeed, the same reinsurance placement concept may have three
different names in three different markets, such as Asia, Europe, and the United
States. In addition, different markets may use the same term to refer to different
reinsurance placement concepts. Not surprisingly, the participants in global
reinsurance transactions can find many of the terms confusing.
[00297] To address these problems of terminology, the present invention establishes
universal user interfaces and templates that standardize the names used to refer to the elements of the reinsurance placement business, such as participants, processes, calculations, and other concepts. Cedent interface 312 and reinsurer interface 314 are examples of these universal user interfaces. According to this embodiment of the present invention, each of the interfaces 312 and 314 use the same names to describe reinsurance-relevant data, such as program conditions, terms, and prices. For example, Figure 11D shows the standardized names of proposal/program information {e.g., program, type of reinsurance, line of business, and perils) and non-proportional layers and options {e.g., treaty type, cover, AAD, and AAL) used in cedent interface
312, which would be mirrored in the reinsurer interface 314. In this manner, the
cedent and the reinsurers can transact within a standardized framework, using agreed-
upon definitions. As more cedents and reinsurers participate, the standardized
terminology will be more widely accepted, thereby facilitating a better understanding
of the market by all participants, removing the terminology obstacles preventing a
truly global market, and making reinsurance placement more efficient.
100298] The global terminology of this embodiment of the present invention is further
promoted by the structured data exchanged between cedents and reinsurers, in the
context of requests for quotations, requests for written shares, and signed
confirmations. For example, the quotation workbook described above in reference to
Figures 13B-13D provides a template in which the cedents and reinsurers enter
conditions, prices, and shares under standardized headings with standardized names.
As the cedents and reinsurers use this template, they understand and accept the global
terminology.
[00299] To assist cedents and reinsurers in understanding and conforming to the global
terminology, a further embodiment of the present invention provides a global
terminology software tool that displays a definition pop-up box or window when a
mouse pointer is placed over a reinsurance placement term. Figure 26 shows this
mouse-over text help feature. Each term on a user interface is linked to a glossary
database that contains a definition of the term, along with any synonyms or equivalent
terms from other markets. Thus, as shown in Figure 26, the term "cover" is linked to
the definition: "The cover (layer) of the reinsurance layer. Protection against loss
provided under the terms of an insurance or reinsurance contract." Thus, if, for
example, a user is unsure about what the contents of data field mean, the user need
only place the mouse pointer over the name of that data field to access the definition
of the name or, perhaps, a synonym of the term with which the user is more familiar.
[00300] According to an embodiment of the present invention, the mouse-over text
feature operates in the background of cedent interface 312 or reinsurer interface 314, displaying the contents of the glossary database when the mouse pointer is placed over designated terms. In a further embodiment of the present invention, the mouseover text feature is included as part of the dispatches of spreadsheet files to reinsurers, so that when the different reinsurers open the files, the reinsurers can access the
glossary, 'understand the requested information, and provide the appropriate contents
in the data fields.
[00301] The reinsurance placement system and process of the present invention
provide significant benefits including one or more of the following:
• A better control over the whole process;
• A solution for the creation and renewal of treaty business, enabling cedents to develop programs for reinsurance and to manage the collaboration requirements for ceding the risk to the market;
• An increased transparency;
• An enhanced potential for the optimization of the portfolio;
• An increased speed of the placement;
• An encouragement for placing alternative solutions;
• Helps cedents more effectively manage the value chain between insurer and reinsurer by providing control over complexity of internal reinsurance data collection and validation and by simplifying collaboration with reinsurance partners;

• Provides visibility and reporting of all placements by creating a shared repository for all internal reinsurance data and by simplifying the benchmarking of market conditions and opportunities; and
• Supports strategic decision making by structuring the process to save time, which can then be applied to strategic review and analysis, and by providing timely data delivery.
[00302] Although this specification describes the present invention in the context of
reinsurance, one of ordinary skill in the art would appreciate that the systems and methods of the present invention apply equally well to the selling of insurance of all types, and to the forming of agreements to assume risks of others.
[00303] The foregoing disclosure of the preferred embodiments of the present
invention has been presented for purposes of illustration and description. It is not intended to be exhaustive or to limit the invention to the precise forms disclosed. Many variations and modifications of the embodiments described herein will be obvious to one of ordinary skill in the art in light of the above disclosure. The scope of the invention is to be defined only by the claims, and by their equivalents.
[00304] Further, in describing representative embodiments of the present invention, the
specification may have presented the method and/or process of the present invention as a particular sequence of steps. However, to the extent that the method or process does not rely on the particular order of steps set forth herein, the method or process should not be limited to the particular sequence of steps described. As one of ordinary skill in the art would appreciate, other sequences of steps may be possible. Therefore, the particular order of the steps set forth in the specification should not be construed as limitations on the claims. In addition, the claims directed to the method and/or process of the present invention should not be limited to the performance of their steps in the order written, and one skilled in the art can readily appreciate that the sequences may be varied and still remain within the spirit and scope of the present invention.

We claim:
1. A system for facilitating negotiation of placement of reinsurance business between a cedant and
a reinsurer comprising:
a host server (201) adapted to
communicate through a computer network (204) with a plurality of cedant computers (206),
receive a plurality of reinsurance programs from the cedant computers (206),
receive designations from the cedant computers (206) of selected programs to include in a reinsurance package,
automatically compile the selected programs into the reinsurance package,
receive an indication from the cedant computers (206) of selected reinsurers to receive the reinsurance package,
dispatch the reinsurance package to a file transfer server (202) in communication with the host server (201), and
forward to the selected reinsurers an electronic communication (252) containing a link to the reinsurance package through which to access the reinsurance package; and
the file transfer server (202), wherein the file transfer server (202) is adapted to
communicate with a reinsurer computer (208) through a computer network (205),
receive and store the reinsurance package from the host server (201), and
transmit to the reinsurer computer (208) the reinsurance package (253) accessed by the reinsurer through the link.
2. The system as claimed in claim 1, wherein the computer network (204), linking the host server
(201) and the cedant computers (206), and the computer network (205), linking the file transfer server
(202) and the reinsurer computer (208), include the internet; wherein the system further comprises one or more firewalls, the firewalls being configured such that the host server (201) and the file transfer server (202) communicate with cedant computers (206) and reinsurer computers (208) through the firewalls; and wherein the host server (201) is further adapted to associate quotations from the selected insurers with the appropriate reinsurance package and cedant.

3. The system as claimed in claim 1, wherein the host server (201) is adapted to receive risk data and program information from the cedant computers (206), and to prevent access to the risk data and program information by the reinsurer computer (208).
4. The system as claimed in claim 1, wherein the host server (201) is adapted to receive a completed quotation spreadsheet and to associate the spreadsheet with the reinsurance package.
5. The system as claimed in claim 4, wherein the host server (201) is adapted to receive the completed quotation spreadsheet by one of:
uploading the completed quotation spreadsheet from an electronic communication received by the cedant computer (206) from the reinsurer computer (208); and
receiving manual input of the completed quotation spreadsheet.
6. The system as claimed in claim 4, wherein the completed quotation spreadsheet contains the quotation, and wherein the host server (201) is further adapted to display the quotation along with other quotations for the reinsurance package from other reinsurers.
7. A method for facilitating negotiation of placement of reinsurance business between a cedant and a reinsurer comprising:
receiving in a host server (201) a plurality of reinsurance programs from cedant computers (206) through a computer network (204);

receiving in the host server (201) designations from the cedant computers (206) of selected programs, from among the plurality of reinsurance programs, to be included in a reinsurance package for the reinsurer;
automatically assembling by the host server (201) the selected program into the reinsurance package;
receiving in the host server (201)an indication from the cedant computers (206) of selected reinsurers to receive the reinsurance package;
receiving and storing in a file transfer server (202), in communication with the host server (201), the reinsurance package from the host server (201);
forwarding from the host server (201) to the selected reinsurers an electronic communication containing a link to the reinsurance package through which to access the reinsurance package;
transmitting from the file transfer server (202) to a reinsurer computer (208) through a computer network (205) the reinsurance package accessed by the reinsurer through the link and including the selected programs;
receiving a quotation from the reinsurer for the reinsurance package; and
providing the cedant with access to the quotation.
8. The method as claimed in claim 7, wherein the host server (201) and the file transfer server (202) communicate with cedant computers (206) and reinsurer computers (208) through firewalls and the internet; and wherein the host server (201) associates the quotation from the reinsurer with the appropriate reinsurance package and cedant.
9. The method as claimed in claim 7, wherein the reinsurance package includes unstructured files and a structured spreadsheet.
10. The method as claimed in claim 7, wherein the reinsurance package includes unstructured files containing risk data and a structured spreadsheet describing conditions of the selected programs and containing fields in which to enter quotes, and wherein providing access to the quotation comprises

receiving the structured spreadsheet with the fields completed by the reinsurer and storing the spreadsheet on the host server (201).
11. The method as claimed in claim 7, further comprising performing a plausibility check on the
quotation before providing the cedant with access to the quotation.
12. The method as claimed in claim 7, further comprising:
storing the plurality of reinsurance programs on a first server,
storing the reinsurance package on a second server, wherein the second server is separated from the first server by a firewall; and
storing the quotation on the first server.
13. The method as claimed in claim 12, wherein the reinsurer has access to the second server but not the first server.
14. The method as claimed in claim 13, wherein prior to receiving the plurality of reinsurance programs, the method comprises:
receiving risk data from the cedant, wherein the plurality of reinsurance programs is based on the risk data of the cedant; and
storing the risk data on the first server.
15. The method as claimed in claim 7, further comprising:
recording an audit trail documenting the reinsurance package, the quotation, and commentaries by the cedant and the reinsurer; and
displaying the audit trail to the cedant.
16. The method as claimed in claim 7, wherein receiving a designation from the cedant of selected

programs comprises displaying a matrix that lists the plurality of reinsurance programs against a plurality of reinsurers, wherein the reinsurer is among the listed plurality of reinsurers, and wherein the designation of selected programs is made on the matrix.
17. The method as claimed in claim 7, wherein providing the cedant with access to the quotation
comprises one of:
automatically uploading the quotation into an interface accessible to the cedant; and
receiving manual input of quotation through the interface.
18. The method as claimed in claim 17, wherein providing the cedant with access to the quotation further comprises displaying the quotation on a program by program basis.
19. The method as claimed in claim 7, further comprising:
receiving from the cedant final prices and final structures for the selected programs;
providing the reinsurer with access to a final reinsurance package containing the final prices and final structures of the selected programs;
receiving a written share proposal for the selected programs from the reinsurer; and
providing the cedant with access to the written share proposal of the reinsurer.
20. The method as claimed in claim 19, further comprising:
receiving from the cedant final written shares for the reinsurer for the selected programs; and providing the reinsurer with access to the final written shares.
21. A system for facilitating negotiation of placement of reinsurance business between a cedant and ,
a reinsurer, substantially as hereinbefore described with reference to the accompanying drawings.