Reinsurance broker Benfield has launched eCatFac – a system for placing facultative catastrophe risks online. The system will link in to eReinsure, a market-wide facultative reinsurance trading platform.
Benfield has launched the new system to make catastrophe facultative placements more efficient, to respond to clients’ increasing demand for the product, and to improve contract certainty, says Elliot Richardson, head of Benfield’s global facultative solutions team.
“Facultative catastrophe reinsurance has become a very popular product. It’s more proactive than reactive. It’s efficient, tailor-made, and now we will be able to give a very quick response to customers with contract certainty because of the trail this system creates.”
The new system has been made with customers in mind, says Richardson. “We made this for them. Faster turnaround speed is of the essence for customers. It will make us faster and give them a faster response time.” He could not yet estimate how much faster.
Richardson says facultative catastrophe reinsurance has become more attractive following increased treaty reinsurance costs in certain territories after last year’s hurricanes. He says it is ideal for managing peak exposures, and gives you the ability to buy made-to-measure cover. “It’s particularly good on issues such as catastrophe zones and we can factor that specific information into this [technology].”
EReinsure built the eCatFac system for Benfield. The broker already uses eReinsure’s main industry-wide trading platform, which allows insurers, reinsurers and brokers use to communicate and quote on reinsurance submissions. But this development allowed Benfield to tailor eReinsure’s capabilities to fit its needs.
Igor Best-Devereux, chief executive of eReinsure, says eCatFac is a further development of the eReinsure concept. “The model of eCatFac fits into eReinsure, a generalised internet platform that is used across markets. We have fine-tuned and configured the technology to facultative catastrophe reinsurance, using relevant data that is specific to it. For example, zoning data. EReinsure has been configured to Benfield’s need.”
He believes such systems can help improve brokers’ efficiency. “Brokers have been wrestling with how to be most cost effective, how to improve transparency for regulators and clients,” he says. “This fits into compliance regulations.”
But Best-Devereux adds that, despite some fears, such technology should not be seen as a threat to brokers or any other participants in the reinsurance chain. “This will not replace the intellectual skills of a broker or underwriter. We are not trying to,” he says. “This is a good example of how you can meld together technology, broker expertise and market opportunity.”