Reinsurance Research Corner
Reinsurance Mark-up Language (ReML)
Committee on Reinsurance Research
Task force on ReML
Michael Laufer
James Matusiak
Michael Tranfaglia
Mark Verheyen
What is XLM?
•
XML (eXtensible Markup Language) is the electronic
language of the Internet, facilitating real-time, multiplatform communication.
•
XML in P&C: a standard that addresses the real-time
requirement by defining P&C transactions that include
both request and response messages for underwriting,
claims and accounting transactions
Broker Market Reinsurance Submission
Data Flow – Current
Ceding Company
The ceding company
compiles raw data from
source files
Broker
The broker consolidates
the raw data into a
submission
Reinsurer
The reinsurer reformats
the submission data for
use in pricing models
How would ReML be used?
•
ReML would be used to efficiently streamline the
transfer of information between insurers, brokers, and
reinsurers via the XML standards.
•
ReML would impact:
•
•
Submissions
Pricing
Broker Market Reinsurance Submission
Data Flow - ReML
Ceding Company
Broker
Reinsurer
The ceding company
compiles raw data from
source files
The broker consolidates
the raw data into ReML
format
The reinsurer inputs
ReML data into pricing
models
ReML Stakeholder Issues
What are the costs?
•Cedant or broker would have to spend significant time / money up front to
get submission data in standardized ReML format
•Reinsurer would have to spend significant time / money up front to
standardize inputs into pricing models
What are the benefits?
•Time savings for reinsurers in scrubbing and inputting data
•Quicker quote turnaround?
•Reduced reinsurance premium for cedant if reinsurers pass savings
along?
ReML Stakeholder Issues
Ceding Company
•Is a ceding company willing to provide standardized ReML data submissions
for broker markets if a direct market is willing to provide comparable terms
and pricing without requiring data standardization?
Broker
•Is a broker willing to standardize ReML data submissions for reinsurers in
the hopes of obtaining quicker turnaround / better pricing from reinsurers?
What if only a minority of reinsurers adopt ReML? Would brokers continue
supporting standard?
Broker Market Reinsurer
•Would a broker market reinsurer provide better terms / pricing or quicker
turnaround for submissions provided in ReML versus non-standardized
submissions?
Direct Market Reinsurer
•Would a direct market reinsurer press a client to provide standardized ReML
data submissions? Or would they see a competitive advantage over broker
markets by being more flexible with data submissions?
Submissions and Pricing
• Consistent data elements across submissions by LOB
• Data can be downloaded directly into reinsurers pricing
model(s).
• No re-keying and manipulating data
• Standard data set and definitions
• Consistent content and quality
Advantages
• This could decrease delays in the submission
process by allowing standard data inputs into
actuarial pricing models
• Uniformity of information could potentially
increase the efficiency of the reinsurance
markets
• ACORD data standards provide a building
block for this project
Disadvantages
• The cost on behalf of ceding companies may be
too large to offset perceived gains in efficiency
• The XML approach has not caught on with other
areas such as financial statements
• The scope of this project is massive
Questions
•
What actions are others taking with regard to
collecting submission data? Who would oppose a
standard? Who would favor a standard?