Specifically, SRS, one of the nation's largest third-party administrators (TPA) serving the property/casualty insurance industry, "upgraded" to a new technology platform to better support the rapidly expanding requirements of its captive clients. Captive clients asked for expanded functionality to support more options for granularity of data, and more tools to control their costs and better manage their claim and business exposures.
"The skills and expertise required to be a quality third-party administrator of property/casualty claims are transferable to a number of different businesses, and captives represent a tremendous opportunity to take those skills to the next level," says Michael A. Cirillo, SRS senior vice president, New Business Development.
"But to get there, we needed to listen carefully to our captive clients, talk to our carrier partners and then create front-end data and business solutions that would meet the unique needs of both parties--both for overall program administration as well as reporting capabilities for captive members."
In fact, Cirillo says captives (akin to "virtual" insurance companies created as a form of self-insurance) represent nearly half of all the insurance business in the United States. For SRS, continued success in the captive market required a long-term investment in both people and technology to achieve SRS' mission of quality, consistency innovation and outcomes in a market where meeting varied business needs is a challenge that is easier said than done.
Why? Many nontraditional markets are extremely complex from an organizational, communication, data and billing perspective.
One of the biggest challenges in this market, Cirillo explains, is that most TPAs today are tied to legacy systems or organizational structures that are not flexible enough to meet unique client requirements. Any TPA can handle a claim, for example, but the vast majority can't automate complex data needs.
According to Cirillo, if it's being done at all, it's being done manually. SRS takes a consultative approach with its clients, and partners with them to fine-tune the data and undertake detailed data analytics to help captives members lower their claim costs.
"When TPAs started servicing this alternative market business, many tried to use a cookie-cutter approach and put their clients onto existing technology platforms," he says. "The captives' first challenge is underwriting, of course. But the second piece is having ready access to consistent quality data and identifying the right strategies for that particular captive to bring about the right combination of claims management trends and outcomes. Many captive buyers look for a business partner that can bring all the right pieces to the table."
SRS enlisted the aid of its captive clients and carrier partners to help the organization develop new tools that can be coupled with SRS' proven methodologies and support. To create its new platform, SRS (www.specialtyriskservices.com) embarked on a two-year process, which included what Cirillo describes as "deep dive" market analysis, as well as requirements, solution design, building and implementation.
"We met with the leading players in the captive market to ensure what we built met their needs," Cirillo says. "It must be flexible enough to meet not just current needs, but unanticipated future needs as well."
Some current captive needs include:
-- Multiparty billing
-- Deductible and aggregate functionality
-- Rules-based fee setup for all SRS services known to date (for increased flexibility)
-- All associated partner/vendor information with applicable dates
-- Direct linkage with the claim system (enabling enhanced data reconciliation via table reads)
-- Third-party data aggregation (i.e., managed care data, disability information, via an external manager tool to handle imports and exports)
"In a homogeneous captive where everyone looks the same (e.g., a fast-food chain), our technology helps captive managers and members work through the layers to find out which drivers, such as safety issues or late reporting, create claim challenges in the different locations," he says.
Captives with varied businesses can also obtain consultative analyses on each of the individual members just as thoroughly.
"In both cases, the more data that is available to slice and dice, the better off captive clients will be," he says. "That's where our approach adds real value."
Cirillo says many risk managers are faced with tough decisions daily, but only have very high-level information on which to base their decisions. They don't always get the data granularity they need to make the best possible choices. But with SRS, that's exactly what they get.
"Our recently developed platform is the first initiative in a long-term strategy to build the tools and infrastructure required for the rapidly emerging needs of alternative market clients. I am confident that these tools will not only help them ensure they are underwriting properly, but that each of their critical partners--carriers, reinsurers, etc.--benefit from our enhanced data capabilities as well," he says.
For more information about how SRS can help your captive generate more successful results, contact Mike Cirillo at 860-520-2535, or e-mail him at firstname.lastname@example.org.
piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for
Insights was written and edited by Risk & Insurance®
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December 12, 2007
Copyright 2007© LRP Publications