DARK MATTER OR DARK DATA? Unfortunately, it’s no secret that, on occasion, risk data can remain


untouched from the time it is recorded by a retailer to it entering the underwriting systems of a syndicate. This means a syndicate could be bound to pay a claim represented by data that hasn’t been looked at, much less reviewed for underwriting purposes.


Over time, as renewals occur, this ‘dark’ data can become entrenched


and solidify. It can come back year after year, in renewals, increasingly posing a peril for anyone who dares open it and actually compares the risk with what the syndicate believes it is insuring.


What percentage of delegated authority data may be represented by this unvetted data is anyone’s guess, but the stakes are high.


In nearly all cases, the process by which the coverholders themselves ‘lift’


the required data from their retailers and place it onto templates is only a one-step process. There is generally no placement of these bound risks onto an internal coverholder bordereau management system. The entire bordereau effort of the coverholder is aimed at only providing the data to the markets.


Because there is no exit ramp to any coverholder system for this


bordereau information, the coverholders rarely have accessible information other than aggregate numbers about the risks they’ve bound. Hard file copies of policies are locked in file cabinets, but access is difficult.


Adding even more fog to this murky picture is the fact that many


“ Simply put, syndicates, MGAs, coverholders and programme brokers that can better manage individual risks will perform better and earn more money.”


US COVERHOLDERS In the US, there are more than 1,100 Lloyd’s coverholders. Each has assigned premium, location and underwriting parameters within which they must bind business on behalf of their markets. Peter Montanaro, head of delegated authorities in the Lloyd’s performance management directorate, estimated on CATEX-TV that US-delegated authority comprises about $4.1 billion in annual premium.


Large premium numbers can lead to large claim numbers. The need for syndicates to report to management, and the Franchise Board, specific and precise information about the quality, location and claim history of each specific risk of their delegated representative has become a key concern of Lloyd’s.


American coverholders can encounter issues that mimic those challenging


Lloyd’s syndicates. Just as most US coverholders have retailers producing programme and bordereau business, Lloyd’s syndicates active in binder business have coverholders producing delegated authority business.


coverholders outsource their entire delegated authority claim process to outside third-party administrators. The coverholder receives the claim data, but matching it to a risk is practically impossible as they’ve only retained aggregate data. Having a claim bordereau matched against the premium bordereau to produce individual experience information about a specific risk is impossible for coverholders.


COVERHOLDERS VERSUS MARKETS Many of the problems faced by markets in compiling and managing


clean bordereau data are mimicked at the coverholder level. The all- important difference is that the coverholder is not ‘on’ the risk, while the syndicate is.


The coverholder faces other perils just as hazardous, however.


Coverholders are acutely aware that a series of poorly performing books of business don’t improve their reputation on Lime Street. The coverholders are as interested in the performance records of business coming to them from specific retailers as syndicates are in the performance of business bound by coverholders.


Just a few years ago, this kind of reporting task would have been too daunting to consider. A syndicate with even some delegated authority can easily receive a wide array of data submissions from their coverholders. Merely conflating each of these reports into one overall report was a herculean task. Matching specific premium and claim information to each location or to each risk was impossible.


That uncertainty need exist no longer. Automatic and instant verification


of coverholder and/or specific risk performance is being done. With today’s technology, a market can instantly monitor the performance of a coverholder and adjust it as needed with his aggregate book.


The coverholder needs to report specific risk information on bound THE PIVOT POINT BORDEREAU/


risks to its market. The coverholder gleans this information by culling through a disparate set of information streams from retailers, including faxed policies, hard copy policies, scanned email copies of policies, mailed spreadsheets, and even the odd Accord policy. The process is laborious.


58 | INTELLIGENT INSURER | Summer 2011


PROGRAM MANAGEMENT SYSTEM The Pivot Point Bordereau/Program Management System does just


that. The system quickly funnels any disparate type of data directly into the web-based management system. Once securely archived in the ‘cloud’,


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64