Devil's Advocate Review identifies millions of dollars of potential reinsurance recoveries

1. Background
An underwriting agency active throughout the 20th century went into run off in the early 1970's, the claims relating to which became extremely active again in the late 1980's. The reinsurers participating in the final year of the agency had assumed by way of portfolio transfers all of the preceding year liabilities.

2. Problem
Our Clients, the solvent reinsurers participating in the final year, appointed a third party administrator ("TPA") to manage the run-off on their behalf, however the claims continued to rise and there had been minimal reinsurance recovery to date. With a view to better mitigating reinsurers' exposures, JTW were asked to consider the present resourcing and strategy of the TPA.

3. Process
A comprehensive devil's advocate review of all departments of the TPA was conducted. The programme of risks written was assessed and the reinsurance protection programme researched and reconstructed. All aspects of the premium, claim and accounting administration, and particularly claims adjusting standards, were considered.

4. Resolution
Recommendations were adopted to implement a reinsurance collection programme based upon reconstructed records and a commutation initiative on the inwards business was commenced, ultimately securing millions of dollars in savings.