Reinsurance Function, Governance, Organization, Operational Processes, ERM Processes
The reinsurance function implements the reinsurance strategy and manages the reinsurance operational processes.
Its governance is complex. It involves the governing bodies in decision-making and specific control by the risk and actuarial functions in the context of Solvency II. A hallmark of its organization is the extent of both its coordination role among operational functions within the insurance company and its liaison role between the insurance company and reinsurers or brokers. The reinsurance function manages a wide range of operational processes. Its contribution to ERM processes as risk mitigation activity is critical.
Exene helps insurers to deploy the reinsurance function, particularly its governance, organisation, operational processes and ERM.
Governance of the Reinsurance function
Decision-making by the insurer on reinsurance matters involves high-level decision-makers, quite complex management information and decision models, and an agenda constrained by the treaty renewal deadlines. Regulation has also established an increased demand for documentation and scrutiny by the insurance supervisory authority.
Exene helps insurance entities and groups to improve the governance of their reinsurance function by clarifying the bodies involved in the decision-making process – definition, approval, implementation, monitoring - and their interactions. We also help boards and top management specify reinsurance reporting suitable for decision-making and assist with external communication on reinsurance.
Organization of the Reinsurance function
The reinsurance function of an insurer is often a key operational function consisting of a small highly-qualified team. This team has, simultaneously, permanent technical interaction with nearly all direct insurance functions, a role of procurement negotiator and partnership manager when dealing with reinsurers and a close relationship with the top management and both risk and actuarial functions of the company.
Exene assists with improving the operational effectiveness and performance of the reinsurance function and reducing its operational risk. We also provide temporary tactical support to the Head of the Reinsurance function.
Reinsurance Operational Processes
Exene has identified 10 operational processes that make up the activity of the Reinsurance function.
Most of these processes have a high degree of transversality within the organisation, carry a significant operational risk and are impacted by increased regulatory and documentation requirements.
We use both process analysis and change management methods to increase the effectiveness and performance of reinsurance operational processes. In particular, we help insurers to structure the target operational reinsurance processes within the context of Solvency II.
ERM Processes of the Reinsurance function
Reinsurance, as a risk-mitigating activity by the insurer, contributes actively to the general process of enterprise risk management (ERM). The Reinsurance function also organises its own activity according to the ERM integrated cycle of risk identification, measurement, management, monitoring and reporting.
Exene helps insurance companies to position the reinsurance activity correctly at each stage of the ERM cycle.
Some related experience
Establish the governance and organization of the Reinsurance function within the Solvency II framework
Structure the prudential reinsurance report to be inserted in the solvency report (French regulation)
Structure support for the presentation of the balance sheet and reinsurance operational plan for the Board of Directors and General Management
Formalize the description of Head of the Reinsurance function
Provide technical assistance to the Head of Reinsurance during the renewal phase (Life and P&C)
Model the existing and Solvency II-compliant reinsurance processes of a P&C company
Design the corporate actuarial process dealing with ceded reinsurance in a Solvency II context
Document procedures of the reinsurance function in a perspective of operational risk control
Redesign and implement the “pledge asset management” process
Audit the process entitled ”Facultative reinsurance administration”
Apply the ERM cycle of risk identification/measurement/management/monitoring/ reporting within the Reinsurance function.
Develop a committee organization designed to identify risk in the insurance risk domain