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Business Need
A company had known system processing errors, manual processing and complex reinsurance programs. Their management had concerns that reinsurance recoverables had been missed.
Situation Analysis
The business included 37 reinsurance programs, covering all of the client's current and former property and casualty companies, their subsidiaries and affiliates. There had been merger and acquisition activity. The reinsurance process had changed more than once, fluctuating between being centralized and decentralized. The reinsurance handling included manual processing.
Barriers Faced
Data accumulation was difficult due to the volume of claim records. Data was extracted from multiple systems, which became time consuming. Locating supporting documentation for claim billings was difficult in some cases due to the age of the claims. Collection issues with some reinsurers resulted in compromise settlements that reduced some of the original billings.
Paragon's Actions
Paragon reviewed the direct claims for the 37 reinsurance programs. The analysis resulting in the identification and validation of hundreds of claims for which Paragon submitted billings to reinsurers.
Results
Paragon billed approximately $14.5M in paid recoverables for the validated claims, as well as $550K ceded loss reserves.
Specific benefits included:
- A positive impact on the company's bottom line
- Validation of the current billing procedures and processes
- Process improvements and better controls
- Identification of trends in reinsurance reporting and areas of concern (training, processes, etc.)
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