Reinsurance In The Insurance Business: Does It Require Automatization?

In today’s insurance and reinsurance market, information technology is the driving force that allows insurance companies to interact with increasingly demanding and impatient customers successfully. However, according to Simon Mosheshvili, a sophisticated entrepreneur with a prestigious degree in the field of information technology, consumers, who are well versed in technological innovations and actively use them in everyday life, expect a corresponding technical level of service from insurers.

Besides, although the insurance market, for example in the United States and several other economically advanced countries, has long been formed, this area of financial activity still faces a host of problems:

• the need for operational analysis of the effectiveness of different types of insurance;
• the need for rapid assessment of the company’s financial condition for investment;
• the complexity of calculating insurance rates and developing appropriate methods;
• reinsurance: calculations of the partner’s share in premiums and reimbursements and analysis of the effectiveness of working with a particular partner.

The only way to solve all these problems simultaneously is to automatize the process fully, which requires an arsenal of superior knowledge in the field of computerization. For this purpose, Simon Mosheshvili recommends the IT engineering company Digital Edge that specializes in delivering a realm of IT solutions, including automation of the processes in the insurance business.

Automatization of insurance and reinsurance processes

Automatized information technologies are aimed at implementing systems that cover all the critical elements of the technological process and guarantee complete data security at all stages of information processing. The implementation of a computerized information system implies automatizing the solution to financial, accounting, and other activities issues. Full insurance technology provides processing of large and interconnected arrays of data:

•         insurance and reinsurance contracts;
•         insurance policies;
•         brokerage agreements;
•         payment orders, etc.

The transition to computerized information technologies is accompanied by a change in the nature and quality of management. The analytical work of managers becomes the main one. It turns information into one of the most significant and accessible resources of the enterprise.

What Is Reinsurance? The Definition of the Concept

Reinsurance represents a system of unique relations between several insurers under the excess risk insurance item. When an insurer undertakes risk hedging that exceeds their capabilities, the risk share is transferred to another insurer, which, in turn, pledges to fully pay the assumed share of risks when an insured event occurs. Organizations that participate in reinsurance are referred to as reinsured and reinsurer, respectively.

Reinsurance is a reasonably frequent phenomenon in the insurance industry. Simon Mosheshvili believes that its automatization will facilitate the work of both individual insurance agencies and the global insurance market.