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Enhanced Decision Making Focus of Everest Re's Core Systems Strategy

The reinsurer's implementation of a new Xuber for Reinsurers core system will enable the company to be more competitive by improving its capabilities around data and analytics.

Reinsurance was long known as a "handshake business" built on business relationships, and for many years it was relatively resistant to the impacts of automation and IT that have transformed other industry segments. However, driven by global competition, financial and regulatory considerations and client demands, reinsurance companies are embracing technologies that improve processes around account and policy management, transactions, and records and document management. The next frontier for the industry is around information and the ability to quickly gain insight into risks, customers and markets through the use of analytics and other data management capabilities.

[3 Ways Insurers Can Win with Predictive Analytics]

Sandeep Bajaj, Everest Re
Sandeep Bajaj, Everest Re

And this was a big factor behind Everest Reinsurance Company's selection late in 2013 of the Xuber for Reinsurers solution to replace its existing legacy system. The deal made Everest Re the first customer to begin implementation of Xuber's platform for reinsurers. The suite includes four components: Xuber Contract, Xuber Claims, Xuber Billing and Xuber Retro Ceding. Everest will implement Xuber Claims, Xuber Billing and Xuber Retro Ceding while developing its own underwriting workstation.

The initiative is part of a broader rethinking of Everest Re's internal processes and business model that is being driven by a more complex and volatile market, notes Sandeep Bajaj, senior technology officer. "Given changing scenarios, market dynamics and the ever-evolving reinsurance market space, to continue to be competitive and to enhance the Everest brand, we are committing more investments in IT to help us propel forward at faster pace," Bajaj says.

Barry H. Smith, Everest Re
Barry H. Smith, Everest Re

Adds Barry H. Smith, Everest Re's executive vice president and chief administrative officer, "Everest is an organization that is very flat. We move quickly and are very decisive. Part of the challenge of working in an environment that is flexible and agile, is for IT to be able to keep up and anticipate where the business is going." The reinsurer undertakes an annual review of its IT strategy and in 2013 that strategy included "a roadmap to look ahead to what we need to be doing in technology at Everest," Smith says. While there had been successful investment in a number of systems, it was clear that it was time to focus on development of a new core system, in order to support the company's global growth goals.

The new core system will integrate with Everest Re's in-house developed pricing and underwriting systems and will facilitate better reporting and greater efficiencies, Bajaj says. "Our intellectual property is in the underwriting system, but [we need] a jointly developed vendor/customer solution to provide more robustness in the back office."

Mike Jones, Xuber
Mike Jones, Xuber

A key benefit of the new core will be standardization of operations on a single worldwide platform. "This will provide significant benefits from standardized processing across the globe, standardized reports, [and] more timely information," Smith says. "We'll see significant operational and reporting efficiencies."

Notes Xuber's vice president of sales Mike Jones, "They were running separate platforms through the globe. We allow them to migrate those platforms to one system. Even more important -- there also will be one common data model. Their ability to farm and mine data, and get analytics out of the system, is really powerful now -- from one core system."

With this foundation, Everest Re will be able to address another priority: adopting a more sophisticated approach to analytics in order to have improved insights into risks "and better understanding of the catastrophe exposures we write," Bajaj adds.

It all provides a modern infrastructure to support the expanded role analytics are playing in Everest Re's business. "We tend to write lot more cat-exposed business," Bajaj notes. "Reinsurers are relying more on systems and better capabilities to look at risks and exposures, and to enhance internal productivity through integrated systems."

Single Version of the Truth

In conjunction with the core modernization effort, Everest Re has been working on creating a comprehensive data model. The reinsurer is building a corporate data model but also will leverage the data model it will inherit while implementing the Xuber platform. "We also have been striving for a standard data dictionary," he says. "There's a significant emphasis on knowing the data, [and the ability] to make decisions on the fly more real-time, to help us differentiate ourselves from our competitors. We want to be able to address the needs of our customer as if we are a smaller company. That's where common data model becomes extremely important. It's a single version of the truth. A more robust, enhanced data model will give us the ability to capture more details, more market information, it makes it more possible to capture market scenarios."

"The concepts of big data are very important to us," adds Smith. "We want faster and friendlier access to the information. Doing that with a worldwide footprint can be a challenge. Agility is important."

In fact, for a company such as Everest Re, the challenge is that there can be so much data that it has the potential to impede agility. The reinsurer has almost 40 years' worth of data, going back to its origins as Prudential Reinsurance (Prudential sold its reinsurance business in 1995 and the company adopted the Everest Re name in '96).

The goal, he says, is "Profitable growth through better decision making [and the use of] data analytics." With the foundation the new core system provides, "Our focus is on the front-end, on data and more precision about what we do. We are building a platform that will enable us to better understand the risks we are taking on."

Regarding the relationship with Xuber, Smith notes, "This is a strong partnership, and we are engaged in a quick development effort and launch. We are off to a good start."

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

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