Electronic Data Interchange
In Reinsurance
Thomas Neff
Brokers and Reinsurance
Markets Association
7/26/2016
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What Is BRMA?
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BROKERS & REINSURANCE MARKETS
ASSOCIATION
REPRESENTING 34 REINSURANCE
ORGANIZATIONS
MISSION: IMPROVE EFFICIENCY &
EFFECTIVENESS OF BROKER CHANNEL
ELECTRONIC COMMERCE A FOCUS
EMPHASIS ON ELECTRONIC DATA
INTERCHANGE (EDI)
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Today’s Processing
CEDANT
Post Office
Post Office
BROKER
REINSURER
7/26/2016
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REINSURANCE FOCUS
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PAPER INTENSIVE INDUSTRY
CUSTOM SYSTEMS HAVE BEEN
DEVELOPED
E-MAILS, FAXES, ETC.
NO STANDARD APPROACH
NOT INTEGRATED INTO BUSINESS OR
COMPUTER SYSTEMS
COSTLY TO DO BUSINESS
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REINSURANCE FOCUS
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Challenge: to Improve the communication of
insurance and reinsurance data between
trading partners.
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WHAT IS ELECTRONIC
COMMERCE (“EC”) ?
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DO BUSINESS ELECTRONICALLY
MOVE AWAY FROM PAPER
STORE & EXCHANGE BUSINESS
INFORMATION DIGITALLY
USE COMPUTER TECHNOLOGY &
STANDARDS
NOT JUST THE INTERNET
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Electronic Commerce…
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FAX
E-MAIL
FILE EXCHANGES
EXTERNAL LINKS
TO SYSTEMS
EDI
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IMAGING
VIDEO
COMPUTER
TELEPHONY
THE INTERNET
THE WWW
INTEGRATE WITH BUSINESS PROCESSES
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WHAT IS EDI?
ELECTRONIC DATA INTERCHANGE
“THE COMPUTER-TO-COMPUTER
EXCHANGE OF BUSINESS DATA
IN A STANDARDIZED FORMAT”
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OBSTACLES TO EDI
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AGREEMENT ON A NEED FOR PROGRESS
AGREEMENT ON DATA
AGREEMENT ON STANDARDS
OVERALL RESISTANCE TO CHANGE
– WORKFLOWS
– BUSINESS PROCESSING
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BENEFITS OF EDI
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CONSISTENT DATA
ELIMINATE RE-KEYING
REDUCE STAFF NEEDS FOR ROUTINE
PROCESSING
FASTER RECEIPT/TURN-AROUND
ENABLE BUSINESS PROCESS CHANGES
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EDI Processing
VAN
TRANSLATOR
VAN
VAN
TRANSLATOR
TRANSLATOR
CEDANT
APPLICATION
7/26/2016
REINSURER
APPLICATION
BROKER
APPLICATION
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COMPONENTS OF EDI
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STANDARDS (“MESSAGES”) DEFINED BY
INDUSTRY PARTICIPANTS
SECURE NETWORKS
“OFF THE SHELF” SOFTWARE AVAILABLE
BUSINESS PROCESS & SYSTEM
CHANGES TO REALIZE FULL POTENTIAL
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EDI IN REINSURANCE
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FORMED A JOINT VENTURE IN 1992
– TO LOOK AT GLOBAL INDUSTRY NEEDS
– TO DEFINE STANDARD BUSINESS
TRANSACTIONS
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MISSION TO DEVELOP ONE SET OF EDI
STANDARDS FOR REINSURANCE
ALLOW FOR DIFFERENCES IN LEGAL AND
MARKET ENVIRONMENTS
DID NOT WANT TO REINVENT THE WHEEL
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THE JOINT VENTURE: WHO
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PARTICIPANTS
– BRMA
– RAA
– LIMNET (LONDON)
– RINET (EUROPE + )
– WIN (UK, US +)
– IVANS
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THE JV PRODUCTS
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REINSURANCE BUSINESS
TRANSACTIONS AS EDI STANDARDS
DOCUMENTATION DESCRIBING THE
STANDARDS
“HOW TO” MANUALS TO USE THE
STANDARDS
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THE JV MESSAGES
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COVER ALL RELEVANT BUSINESS
AREAS:
– LOOKED AT THE OVERALL
REINSURANCE BUSINESS
– IDENTIFIED THE PROCESSES THAT
MADE SENSE TO HANDLE VIA EDI
– DID NOT JUST REPLACE PAPER WITH
ELECTRONIC TRANSACTIONS
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JV ACCOUNTING MESSAGES
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TECHNICAL ACCOUNT (“RETACC”)
– INVOICE (TREATY & FAC)
– PREMIUMS, CLAIMS AND EXPENSES
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RETACC
SETTLEMENT OF ACCOUNTS
(“RESETT”)
– PAYMENT ADVICES/REQUESTS
– TIE TO ELECTRONIC FUNDS
TRANSFER
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RESETT
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JV CLAIMS MESSAGE
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CLAIMS NOTICE (“RECLAM”)
– INITIAL LOSS NOTICE
– RESERVES & CHANGES
– LOSS DETAILS
RECLAM
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JV SUPPORTING MESSAGES
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BORDEREAU (“REBORD”)
– POLICY LEVEL DETAIL
– PREMIUMS AND LOSSES
COMMISSIONS (“RECALC”)
 PREMIUM ADJUSTMENTS
(“REPREM”)
REBORD
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7/26/2016
RECALC
REPREM
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JV CONTROL MESSAGES
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DIALOG (“REDIAL”)
– ACKNOWLEDGMENTS
– REJECTIONS/ERRORS
– EXCHANGE KEY REFERENCES
REDIAL
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JV PLACING MESSAGES
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Two JV Messages used in Electronic
Placing of Reinsurance Business:
– RECORD Message
– RELIST Message
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RECORD MESSAGE
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Purpose:
– Provide Core data for the initial placement
and endorsement of Reinsurance
Coverage in a standardized format
RECORD
Cedant  Broker  Reinsurer
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RECORD MESSAGE
 Placing
Stages Can Include:
»pre-quotation/quotation/order offer proposal
»request for line/binder
»request for additional information
»acceptance/declination
»closing
»endorsement request
»acceptance/cancellation
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RELIST MESSAGE
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Purpose:
– Provides some detail regarding individual
RELIST
risks (acts as a schedule of items):
- Details include only items normally
captured by insurers or brokers or required
by reinsurers
- Data fields describe the risk in detail
(parties, dates, periods, code lists, etc.)
- Coverages, Deductibles, Premiums and
Deductions can be specified per risk or per
insured peril
- Some limited text can be captured
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RELIST MESSAGE
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The RELIST Message allows for the identification
of key pieces of information:
– Provides links to supporting RECORD message
– Gives details regarding one or more INDIVIDUAL
risks, such as:
– Fleets (aircraft, vessels)
– Buildings
– Machines (engineering risks)
– Cargo
– Vehicles
– Etc.
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GESMES STATISTICS MESSAGE
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Purpose:
– Used to exchange statistical data between
two trading partners
– Multi-dimensional data of any type can be
exchanged
»such as the usual contents of a
spreadsheet exchanged in the paper
environment today
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GESMES MESSAGE
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Concepts:
– NOT a JV Developed Message
– NOT using all segments of the Message
– Used by other industries and the reinsurance
industry to convey general statistical information
– GESMES has different segments than “traditional”
JV message segments
– Functionality within message differs from other JV
messages: Define the data within the message
GESMES
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GESMES MESSAGE
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Generic Exhibits were used to determine
the applicability of the message for
Reinsurance Placing support, including:
– Loss/Premium Development
– Loss/Detail Listing and Losses By Event
– Contract Experience
– Historical Rate Change
– Limits/Risk Profile
– Not limited to these exhibits
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GESMES MESSAGE SEGMENTS
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HOW WILL IT WORK?
– Message Sender Tells Message Receiver
how the data is set up – allows for FLEXIBILITY!!!
– Define Heading Information
Message
Sender
– Define Rows and Columns
– Populate Heading and rows/columns with
data to be analyzed by message receiver
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Now The Picture Is Complete…
RECORD
GESMES
REBORD
&
RELIST
RECLAM
REPREM
RETACC
RECALC
RESETT
REDIAL
SECURE NETWORK
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REINSURANCE EDI IS HERE
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ACCOUNTING/CLAIMS MESSAGES ARE
TESTED, DOCUMENTED & READY
PLACING/STATISTICS SHORTLY
S2 INITIATIVE UNDERWAY
19 + BRMA MEMBERS ARE DOING EDI NOW
SOME BRMA MEMBERS HAVE DONE AWAY
WITH THE PAPER !
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THE BRMA S2 INITIATIVE
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ACHIEVE CRITICAL MASS IN BRMA
ELIMINATE PAPER TRANSACTIONS
REMAIN COMMITTED TO USING THE
STANDARDS CONSISTENTLY
RESOLVE MESSAGE ISSUES FAST
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PROVIDE AN IMPLEMENTATION FORUM
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7/26/2016
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INDUSTRY COMMITMENT
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REINSURANCE SOFTWARE VENDORS ARE
BUILDING EDI COMPONENTS
DIRECT REINSURANCE WRITERS ARE
IMPLEMENTING EDI
LARGE CEDING COMPANIES ARE LOOKING
TO HANDLE THEIR REINSURANCE
PROGRAMS VIA EDI
WEBSITES ARE BEING REVIEWED AS
POTENTIAL “PULL FORWARD” SOLUTIONS
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Timetable of Deliverables
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RECORD - 6/98 for Approval by JV
RELIST - 6/98 for Approval by JV
GESMES - Next Deliverable from contractor
scheduled for 5/98
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Where Are We Going?
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More Use of Accounting/Claims Messages
Use of the RECORD, RELIST and GESMES
Development of Industry and Company
Repositories
Ceding Company Implementations
7/26/2016
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QUESTIONS???
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