London-based technology company ri3k and the American Council of Life Insurers (ACLI) have unveiled plans for the world's first life reinsurance data hub, where life insurers and reinsurers will be able to connect and exchange information on one network.
Initially the system will focus on the North American market. The ACLI and ri3k intend to begin limited operations for the US life market by the end of September 2002. It will be fully operational worldwide by September 2003.
Northwestern Mutual senior actuary Jack Bailey said: "The utility will allow broader access to the life reinsurance process and provide greatly improved efficiency in its administration.
"By automating the inter-change of data, ACLI and ri3k will be helping the industry stay competitive and better serve its millions of policyholders."
The hub aims to create an end-to-end flow of information: cedants and reinsurers will be able to move data between themselves electronically, without manual re-keying.
Currently, transaction data is passed from cedants to reinsurers using their own formats. Reinsurers must then translate, clean, manipulate and enter that data manually onto their own systems, a process that creates inefficiency, frictional cost and error.
The hub will receive the data from the cedants and output the information in a standardized 1998 ANSI and ACORD format, which can then be passed onto reinsurers.
RGA Reinsurance Company chief executive officer David Atkinson said: "There are two aspects that make this effort more likely than other efforts to succeed. First, this is a joint effort between direct writers and reinsurers, facilitated by the ACLI, that is structured to benefit all participants, not just the reinsurers.
"Secondly, with ri3k, we have a technology provider with relevant experience and a successful track record."
ri3k provides secure technology infrastructure for the insurance and reinsurance industry. The company specialises in building xml-based infrastructure technology that allows contracts to be administered and completed electronically.
Founded in May 2000, it has built reinsurance hubs for European and Asian non-life, as well as a Run Off Centre for companies operating in the non-life run-off industry.
