Vous êtes sur la page 1sur 100

BUSINESS BLUEPRINT

DOCUMENT

regarding
the implementation of

MBA

1
REVISION HISTORY

Version Date Author Description

1.0 26-Jan-2018 Remion Bacova Template Version

SIGNATURE SECTION

Document title MBA Blueprint

2
Document title MBA Blueprint

Contents

INTRODUCTION 6

BASIC CONCEPT AND MAIN TARGETS 7

PARTICIPANTS 8

1 SALES/UNDERWRITING MANAGEMENT 9

1.1 Requirements from Sales/Underwriting Management Module 9


1.1.1 Policies 9
1.1.1.1 Insurance Class Table 9
1.1.1.2 Insurance Type Table 10
1.1.2 Mandatory Fields by Type 11
1.1.2.1 TPL001 12
1.1.2.2 Green Card 16
1.1.2.3 Border 21
1.1.3 Reports 22

3
2 RECEIVABLES/COLLECTION MANAGEMENT 25

2.1 Requirements from Collection Management 25

3 CLAIMS MANAGEMENT 26

3.1 Claims Processes 26


3.1.1 Claim Types 26
3.1.2 Claim Statuses 26
3.1.3 Claim Treatment Workflow by Type 26
3.1.4 Claim Case Documentations by Type 26
3.2 KPIs and Claims Reports 26
3.2.1 Components of Gross Loss Ratio 26
3.2.2 Court Case Claims Report 38
3.2.3 Late Reported Claims 40
3.2.4 Top 10 Claims 41
3.2.5 Table 2 – Total Claims Overview 43
3.2.6 Claims paid during a period, according to accident year 47
3.2.7 Claims reported during a period, according to line of business 49
3.2.8 Property Claims Report 50
3.2.9 MTPL Claims Report 51
3.2.10 RBNS History report 53
3.3 Analytic Claims Reports 53
3.3.1 Paid Claims comparison according to type of damage 54
3.3.2 Paid claims comparison according to the Branch 54
3.3.3 Paid claims comparison according to line of business 54
3.3.4 Settled claims comparison according to type of damage 54
3.3.5 Settled claims comparison according to the Branch 54
3.3.6 Settled claims comparison according to line of business 55
3.3.7 Outstanding Claims report 55
3.3.8 Reported claims 55
3.3.9 MTPL Claims according to the type of damage 55

4
3.4 Efficiency KPIs Claims Handling 56
3.5 List of Requirements 58

4 ACTUARIAL MANAGEMENT 60

4.1 Requirements from Actuarial Management Module 60

5 REINSURANCE MANAGEMENT 63

5.1 Underwriting Year Bases, Quota share 63


5.2 Bond Reinsurance Treaty 70
5.3 Underwriting Year Bases, Surplus 70
5.4 Quota Share Loss Occurrence (MTPL & PA QS) 73
5.5 XL Reinsurance Treaties 74
5.6 Combination of XL & QS loss occurring reinsurance treaties 77
5.7 Facultative & Fronting Reinsurance Contract 78
5.8 Requirements from Reinsurance Module 79

6 INTEGRATED APPLICATIONS 83

7 IT MANAGEMENT 85

8 ANNEX 87

9 ANEX 2.1 95

5
Introduction

This Business Blueprint document comprises all open issues and new requests raised by the users
of the insurance companies of VIG Albania as well as VIG Services Shqiperi Shpk.

The document is divided into the following parts:

1. Basic concept and main targets


2. Sales/Underwriting Management
3. Claims Management
4. Actuarial Management
5. Reinsurance Management
6. Integrated Applications

6
Each paragraph includes a description of requirements from economic point of view, technical
point of view and a list of definitions as well as practical examples (e.g. report templates).

Basic concept and main targets


The overall concept of VIG Albania with regard to IT-support concerning insurance business is as
follows:

To implement and maintain an integrated data base, that ensures, that all involved departments
are using the same data base and that processed data is immediately available.

The underlying insurance software should store and manage all data, which is attributable to a
single insurance policy. Manual work should be minimized in order to speed up business
processes and reduce occurrence of human error. Data validity and reliability are the two basic
pillars of an integrated insurance software package. Therefore strong interfaces with non-
insurance IT programs, especially SAP finance applications, are a must.

Beside transactional issues, the multidimensional analysis by use of queries to create standard
and ad hoc reports, are regarded as key functionalities.

7
Figure 1 System Architecture

In the System architecture presented above it is clear the importance of a central database.
Information inserted by each department can be used by other departments based on their
needs and requirements. In this way the same information will be available for all users in a
record time.

Participants

8
1 Sales/Underwriting Management
Sales Department is one of the most important generators of data. Data collected from the client
and the contract sold represents the initial database that is needed by all other departments of
an insurance company.

Some of main functions of Sales department include:

 Selling of various types of insurance policies to businesses and individuals.


 Communicate with policyholders to deliver and explain policy, to analyze insurance
programs and suggest additions or changes or to change beneficiaries.
 Seek out new clients, develop clientele by networking and generate lists of prospective
clients.
 Ensure that policy requirements are fulfilled.
 Explain features, advantages and disadvantages of various policies.
 Calculate premiums and establish payment method.
 Inspect property, examining its general condition, type of construction, age, and other
characteristics, to decide if it is a good insurance.
 Decision support and decision making regarding sales strategies and actions.

All information collected by sales department affects the entire performance and progress of
other departments and the company. For this reason the adequate quality and quantity of this
information is a must. The output from the system must provide detailed information on a
contract level per each client, client segment, and portfolio segment, line of business, sales region
and sales channel. Also integrated reports and multidimensional data must be extracted by the
system.

1.1 Requirements from Sales/Underwriting Management Module


In order to increase the quality and quantity of the information, it is required to have some
mandatory fields as follows:

1.1.1 Policies
In this section are described the classes types and fields for the policies

1.1.1.1 Insurance Class Table

9
ID Albanian Nomination Description
1 Autopërgjegjësia (TPL)-01
2 Karton Jeshil-02
3 Sigurimi kufitar - 03
4 Kasko - 04
5 Shëndeti në udhëtim - 05
6 Sigurim Oferte - 06
7 Sigurim i Kontrates - 07
8 Aksidente personale - 08
9 Sigurimi prones
10 Prona për efekte kredie - 10
11 Sigurimit të mallit në transport - 11
12 Përgjegjësia - 12
13 Para ne kasaforte dhe Udhetim (CIS & CIT)
14 Policat Komplekse - 14
15 Polica e sigurimit nga vjedhja -15
16 Polica e Sigurimit te Banesave - 16
17 Sigurimi i te gjitha rreziqeve ne ndertim (CAR) - 17
18 Sigurimi privat i shendetit
19 Paketa 3A-19
20 BBB-20
21 Pergjegjesia Profesionale -21
22 Sigurimi i te gjitha rreziqeve ne montim (EAR)-22
23 Sigurimi i makinerive-23
24 CMR-24
25 Sigurimi i veprave te artit-25
26 Sigurimi i Anijeve-26
27 Sigurimi i Avioneve-27
28 Sigurimi i Kulturave Bujqesore-28
29 Sigurimi i Blektorise-29
30 Polica ALL Risk-30
31 Aksidente Personale Student-31
32 Sigurimi i udhetareve ne transportin publik
65 i-Fam

1.1.1.2 Insurance Type Table

10
CODE Insurance Class Insurance Type CODE in Doc Description
01 Autopërgjegjësia (TPL)-01 TPL TPL001
02 Autopërgjegjësia (TPL)-01 TPL me limite te larta
01 Kasko - 04 KASKO INDIVID
02 Kasko - 04 Kasko Subjekt
03 Kasko - 04 Kasko PMM - 40

--- Fill other data in the table -----------

1.1.2 Mandatory Fields by Type

Policy General Data

1. Insured sum- a maximum amount that an insurance company will pay to someone who
makes a claim. For various products the Sum Insured should be specified in 2 categories.
Per Event Sum Insured and Aggregate Sum Insured. This is a must especially for the
Liability lines of business.
2. Deductible part (%) - portion of the insured loss (in %) paid by the policy holder.
3. Deductible part (abs) - portion of the insured loss (in amount) paid by the policy holder.
4. Description - characteristics or features of the insured object.
5. Insured Object Type – class of objects with common functional behavior and structure.
6. Fee - a fixed sum charged by the insurance company for the insurance contract.

11
1.1.2.1 TPL001

POLICY CODE

The Code for this type of policy will be TPL001

Insurance Product Object Data

Vehicle Data

7. Vehicle category – class of vehicles with common characteristics that are divided in
different insurance groups.
8. Motor power – vehicle motor power.
9. Carrier Capacity – the maximum carrier capacity of a vehicle.
10. Color – the color of the vehicle.
11. Driving Permit - a grant of driving privileges by the state or another jurisdiction that is
more limited than those available under a license or that is only available under special or
limited circumstances.
12. Number of Seats – number of seats in a vehicle.
13. Year of production – the year when the vehicle was produced.
14. Chassis number - the supporting frame of a structure (as an automobile); the frame and
working parts (as of an automobile or electronic device) exclusive of the body or housing,
unique number for each vehicle.
15. Brand - the maker of the car, as distinct from a specific model.

12
16. Model - a particular model of vehicle sold under a brand by a manufacturer, usually within
a range of models, usually of different sizes or capabilities.

Client Data

17. Type of the client – the client might be an individual or a company.


18. TIN/Personal ID – for individual clients Personal ID and for company clients the trade
identification number (TIN).
19. Date of Birth – date of birth of the client.
20. Gender – the gender of the client.
21. Address – the address of the client.
22. Location - the place of settlement, activity, or residence of the client.
23. Accident history (has accident Yes/No) – the history of accidents for a client. Accident
History shouldn’t be limited only with Yes/No but if the answer is YES than a text box
with description should be activated, in order to write the information about the accident.
24. License permission number - an official document or card which shows that you have the
legal right to drive a vehicle(for policies that insure a vehicle)
25. Plan –is a package of covered risks in health insurance policy that is decided in the moment
the contract is sold.
26. Country of study – in student’s insurance is necessary to specify the country of study where
these students will be resident for a period of time.
27. Business Category – the business category of the client in cases when the client is a
company. (ex. SME, Corporate)
28. Type of Business – the business activity of the client in cases when the client is a company.
(Ex. Industry, Services, etc.)

The following client data fields need to be added because are not in the system. These fields
shouldn’t be mandatory:

1. Branch – when the client is a bank it is required to add a specification of the branch of the
bank.
2. Other Names – this field will be needed in the cases that the insured/beneficiary or
contractor is composed by two or more clients

Table of Dependencies

Vehicle Data The group of data to unique identify the insured vehicle
Client Data Data of the proprietary of the car
Second Driver Data of the Second driver insured

13
Agent Data of the Agent Who issued the policy
etc

User Interface Print Screens

User Inputs

1- Plate Number.

The user enters the plate number of the vehicle to be insured. The system automatically checks
for the data of this car at the system of AMF. All this data are displayed in the user interface. User
cannot change any of the data automatically displayed by the system. Etc.

2- Second Driver ID number

User enters the second driver NID (National ID). The system automatically checks for this id in
the AMF web service and displays at user interface the second driver data.

3- Date from – Date to

Period of the insurance policy validity. According to the NEW AMF regulation the Starting date of
the Insurance policy validity cannot be more than 30 Days from the date of issuing the policy.

14
Product Print Outs

Product Operations

1- Issuing Process
2- Duplicating process
3- Canceling process

Roles and Rights

1- Issuing process Rights


a. The agent
2- Duplicating
a. The agent if it is his own policy
b. The agent if the policy has been transferred to him
3- Canceling process

15
a. The Sales director has the rights to cancel a policy by adding a reason
b. …..

Object Change-Management

While consulting with the policy there should be a report to verify timestamps of each operation
with the policy, it’s duplicate and or reasons of canceling etc. Reference to the report on the
report section

External Communications

To be filled by IT

Screenshots of Actual Application

Additional Print screens if needed other than those specified above

Linked Work Flow

To be filled by IT

1.1.2.2 Green Card

POLICY CODE

The Code for this type of policy will be KJ001

Insurance Product Object Data

Vehicle Data

29. Vehicle category – class of vehicles with common characteristics that are divided in
different insurance groups.
30. Motor power – vehicle motor power.
31. Carrier Capacity – the maximum carrier capacity of a vehicle.
32. Color – the color of the vehicle.
33. Driving Permit - a grant of driving privileges by the state or another jurisdiction that is
more limited than those available under a license or that is only available under special or
limited circumstances.
34. Number of Seats – number of seats in a vehicle.
35. Year of production – the year when the vehicle was produced.

16
36. Chassis number - the supporting frame of a structure (as an automobile); the frame and
working parts (as of an automobile or electronic device) exclusive of the body or housing,
unique number for each vehicle.
37. Brand - the maker of the car, as distinct from a specific model.
38. Model - a particular model of vehicle sold under a brand by a manufacturer, usually within
a range of models, usually of different sizes or capabilities.

Client Data

39. Type of the client – the client might be an individual or a company.


40. TIN/Personal ID – for individual clients Personal ID and for company clients the trade
identification number (TIN).
41. Date of Birth – date of birth of the client.
42. Gender – the gender of the client.
43. Address – the address of the client.
44. Location - the place of settlement, activity, or residence of the client.
45. Accident history (has accident Yes/No) – the history of accidents for a client. Accident
History shouldn’t be limited only with Yes/No but if the answer is YES than a text box
with description should be activated, in order to write the information about the accident.
46. License permission number - an official document or card which shows that you have the
legal right to drive a vehicle(for policies that insure a vehicle)
47. Plan –is a package of covered risks in health insurance policy that is decided in the moment
the contract is sold.
48. Country of study – in student’s insurance is necessary to specify the country of study where
these students will be resident for a period of time.
49. Business Category – the business category of the client in cases when the client is a
company. (ex. SME, Corporate)
50. Type of Business – the business activity of the client in cases when the client is a company.
(Ex. Industry, Services, etc.)

The following client data fields need to be added because are not in the system. These fields
shouldn’t be mandatory:

3. Branch – when the client is a bank it is required to add a specification of the branch of the
bank.
4. Other Names – this field will be needed in the cases that the insured/beneficiary or
contractor is composed by two or more clients

17
------------- Fill other data also ---------------------

Table of Dependencies

Vehicle Data The group of data to unique identify the


insured vehicle

Client Data Data of the proprietary of the car

Second Driver Data of the Second driver insured

Agent Data of the Agent Who issued the policy

etc

User Interface Print Screens

User Inputs

4- Plate Number.

18
The user enters the plate number of the vehicle to be insured. The system automatically checks
for the data of this car at the system of AMF. All this data are displayed in the user interface. User
cannot change any of the data automatically displayed by the system. Etc.

5- Second Driver ID number

User enters the second driver NID (National ID). The system automatically checks for this id in
the AMF web service and displays at user interface the second driver data.

6- Date from – Date to

Period of the insurance policy validity. According to the NEW AMF regulation the Starting date of
the Insurance policy validity cannot be more than 30 Days from the date of issuing the policy.

------------- Fill other data also ---------------------

Calculations and/or dependency between properties

For this product the calculation of price is done through consulting the price table and
extracting the price for the category of the car and period of insurance. (in case there are
bonus malus procedures for deductables and/or bad clients the price depends on other
events to be stated here )

Print Outs

Product Operations

19
1- Issuing Process
2- Duplicating process
3- Canceling process

------------- Fill other data also ---------------------

Roles and Rights

1- Issuing process Rights


a. The agent
2- Duplicating
a. The agent if it is his own policy
b. The agent if the policy has been transferred to him
3- Canceling process
a. The Sales director has the rights to cancel a policy by adding a reason

------------- Fill other data also ---------------------

Object Change-Management

While consulting with the policy there should be a report to verify timestamps of each operation
with the policy, it’s duplicate and or reasons of canceling etc. *Reference to the report on the
report section

External Communications

To be filled by IT

Screenshots of Actual Application

Additional Print screens if needed other than those specified above

Linked Work Flow

To be filled by IT

20
1.1.2.3 Border

21
1.1.3 Reports

Mandatory date fields required above will be used to generate useful and relevant reports from
the system that are crucial from the management point of view. Besides reports that are
generated from the system there are also other reports needed from sales department that are
not supported by the system in this moment. These reports are:

1.1.3.1 Green Card Report

Green Card
Duration
15 Days 30 Days 3 Months 6 Months 1 Year
Category
Description Nr Value Nr Value Nr Value Nr Value Nr Value
A Automjete
B1 Motocikleta
B2 Motokarro
C1 Kamion 15-34.99 KV
C2 Kamion >35 KV
C3 Ambulanca, Mak Funerali
D Ciklomotor
E1 Autobuza (9+1)-(18+1) seats
E2 Autobuza (19+1)-28 seats
E3 Autobuza > 28 seats
F1 Rimorkio kamioni
F2 Rimorkio Autobuzi
F3 Rimorkio te tjera
Total

Green Card report shows the number and value of Green Card contracts based on two criteria:
category and duration of the contract. In the first two columns there are the category of the
vehicle and the description. In the following columns there are shown the number and value of
policies divided per each contract duration.

1.1.3.2 Border Reports

22
Border
Duration
15 Days 30 Days 3 Months 6 Months 1 Year
Category
Description Nr Value Nr Value Nr Value Nr Value Nr Value
A Automjete
B1 Motocikleta
B2 Motokarro
C1 Kamion 15-34.99 KV
C2 Kamion >35 KV
C3 Ambulanca, Mak Funerali
D Ciklomotor
E1 Autobuza
F1 Rimorkio kamioni
F2 Rimorkio Autobuzi
F3 Rimorkio te tjera
Total

Border report shows the number and value of Border contracts based on two criteria: category
and duration of the contract. In the first two columns there are the category of the vehicle and
the description. In the following columns there are shown the number and value of policies
divided per each contract duration.

1.1.3.3 Comparative Sales Report


Evidenca Krahasimore e Realizimit te Objektivave 12 Mujori 2013 2014
Dhjetori 2013 2014
DEGA TIRANE

12/31/2014 12/31/2014
Nr Produkti 12 Mujori 13 12 Mujori 2014 Diferenca % Dec-13 Dec-14 Diferenca %
1 TPL
2 Kufitare
3 Karton Jeshil
I TE DETYRUESHME 0 0 0 #DIV/0! 0 0 0 #DIV/0!
4 Kasko
5 Prona
6 Prona per Kredi
7 Banesa
8 Vjedhja
9 Mall Transport
10 CAR/EAR
11 Garanci Oferte
12 Garanci Kontrate
13 Pergjegjsia Profesionale
14 Pergjegjsia Civile
15 CMR-24+anije
16 Aksidente Personale
17 Shendeti ne Grup
18 Garanci Paradhenie
19 Polica Komplekse/All Risk
20 Paketa 3 A+pasagjeret
21 Shendeti ne Udhetim
II VULLNETARE 0 0 0 #DIV/0! 0 0 0 #DIV/0!
TOTALI 0 0 0 #DIV/0! 0 0 0 #DIV/0!

Comparative sales report shows per each product the amount of premiums for each insurance
contract per each agent and branch by comparing two different periods on monthly and
accumulative basis. In the second column the product are not only shown separately but also
grouped in Compulsory and Voluntary products.

23
1.1.3.4 Premiums per Branch, Agency and Agent Report
Prime per Dege, Agjensi, Agjent

TPL Kufitare Karton Je s hil Vullne tare Total Prim e


De ga 1
Agjensia1
Agjent 1
Agjent 2
Agjesia 2
Agjent 1
Agjent 2
De ga 2
Agjensia 1
Agjent 1
Agjent 2
Agjensia 2
Agjent 1
Agjent 2
De ga 3
Agjensia 1
Agjent 1
Agjent 2
Agjensia 2
Agjent 1
Agjent 2
Totali

Premiums per branch, agency and agent report shows a detailed view of the amount of sold
contracts for each agent, agency and branch for compulsory and voluntary contracts.

24
2 Receivables/Collection Management

2.1 Requirements from Collection Management

1. Support in dunning process


 Automatic submission of dunning notice per client within defined period of time after due
date of premium written (“warning system”, “red light”, etc.)
 Follow up of incoming payments resp. 2nd and 3rd dunning notice
 Dunning report showing all outstanding premiums per client for each stage in dunning
process (important for preparing of appealing to court)

2. Administration of Receivables Management


 Recognition of receivable/outstanding premium at date of invoice per client
 Clearing of receivable at date of payment per client
o In cash
o By bank transfer => interface/upload device for bank statements needed
 Automatic transfer/interface of receivables to SAP accounting module (FI) aggregated per
agent
 Automatic creation of receivables Report with respect to aging structure per agent/branch
office and client

25
3 Claims Management

Claims management involves activities such as opening and closing claims, making payments,
reserving claims, carrying out subrogation recoveries, and working with service providers.
Insurance claims are also opposed to fraudulent activity. As a result, the information required to
operate effectively also to combat insurance fraud is an important part of insurance business. For
all these reasons a complete package of information is the most important key in the success of an
insurance company.

3.1 Claims Processes


3.1.1 Claim Types

3.1.2 Claim Statuses

3.1.3 Claim Treatment Workflow by Type


3.1.4 Claim Case Documentations by Type

3.2 KPIs and Claims Reports

3.2.1 Components of Gross Loss Ratio

The data in the table is the basis for a very detailed analysis of the development in the claim-
handling performance in the areas of claim costs, provisions for claims, process of claims and
liquidation. All information in the table has to be separated according the date of occurrence of
the claim. Main KPIs calculated on basis of this report are e.g. claims frequency, average claim,
claims ratio, run-off result, average reserve, average paid claim, etc.

This report should be created according to Line of Business, on a period basis with regard to
accident year.

CY: current year, i.e. accident year = selected period

26
PY: previous period, i.e. accident year prior to the year of the selected period.

For example, if we want our report for the period 01.01.2015-31.01.2015, in the CY should be
included the claims paid during this period and with accident date 01.01.2015-31.01.2015. In the
PY should be included all the claims paid during the period 01-31.01.2015 but with accident year
prior to this period.

27
Gross Loss Ratio #DIV/0!

Line of business
No. Amount Average
Gross Premium Earned #DIV/0!
Gross Claims Incurred 0 0 #DIV/0!
Gross Claims Paid 0 0 #DIV/0!

Gross Claims Paid CY 0 0 #DIV/0!


Pure Gross Claims Paid CY 0 0 #DIV/0!
Domestic Claims Paid CY 0 0 #DIV/0!
Material Damages 0 0 #DIV/0!
Court Cases Paid CY #DIV/0!
All Other Claims paid CY #DIV/0!
Personal Damages 0 0 #DIV/0!
Court Cases Paid CY #DIV/0!
All Other Claims paid CY #DIV/0!
Foreign Claims Paid CY 0 0 #DIV/0!
Material Damages 0 0 #DIV/0!
Court Cases Paid CY #DIV/0!
All Other Claims paid CY #DIV/0!
Personal Damages 0 0 #DIV/0!
Court Cases Paid CY #DIV/0!
All Other Claims paid CY #DIV/0!
Recoveries Received CY #DIV/0!
ALAE CY #DIV/0!
ULAE CY #DIV/0!

Gross Claims Paid PY 0 0 #DIV/0!


Pure Gross Claims Paid PY 0 0 #DIV/0!
Domestic Claims Paid PY 0 0 #DIV/0!
Material Damages 0 0 #DIV/0!
Court Cases Paid PY #DIV/0!
All Other Claims paid PY #DIV/0!
Personal Damages 0 0 #DIV/0!
Court Cases Paid PY #DIV/0!
All Other Claims paid PY #DIV/0!
Foreign Claims Paid PY 0 0 #DIV/0!
Material Damages 0 0 #DIV/0!
Court Cases Paid PY #DIV/0!
All Other Claims paid PY #DIV/0!
Personal Damages 0 0 #DIV/0!
Court Cases Paid PY #DIV/0!
All Other Claims paid PY #DIV/0!
Recoveries Received PY #DIV/0! 28
ALAE PY #DIV/0!
ULAE PY #DIV/0!
Change in Gross Claims Reserves 0 0 #DIV/0!
Gross Claims Reserves EOP 0 0 #DIV/0!
Gross Claims Reserve EOP CY 0 0 #DIV/0!
Dome stic Claims Re se rve CY 0 0 #DIV/0!
Mate rial Damage s 0 0 #DIV/0!
Court Cases Reserve CY #DIV/0!
All Other Claims Reserve CY #DIV/0!
Pe rsonal Damage s 0 0 #DIV/0!
Court Cases Reserve CY #DIV/0!
All Other Claims Reserve CY #DIV/0!
Fore ign Claims Re se rve CY 0 0 #DIV/0!
Mate rial Damage s 0 0 #DIV/0!
Court Cases Reserve CY #DIV/0!
All Other Claims Reserve CY #DIV/0!
Pe rsonal Damage s 0 0 #DIV/0!
Court Cases Reserve CY #DIV/0!
All Other Claims Reserve CY #DIV/0!
Gross Claims Reserve EOP PY 0 0 #DIV/0!
Dome stic Claims Re se rve PY 0 0 #DIV/0!
Mate rial Damage s 0 0 #DIV/0!
Court Cases Reserve PY #DIV/0!
All Other Claims Reserve PY #DIV/0!
Pe rsonal Damage s 0 0 #DIV/0!
Court Cases Reserve PY #DIV/0!
All Other Claims Reserve PY #DIV/0!
Fore ign Claims Re se rve PY 0 0 #DIV/0!
Mate rial Damage s 0 0 #DIV/0!
Court Cases Reserve PY #DIV/0!
All Other Claims Reserve PY #DIV/0!
Pe rsonal Damage s 0 0 #DIV/0!
Court Cases Reserve PY #DIV/0!
All Other Claims Reserve PY #DIV/0!
Gross Claims Reserves BOP 0 0 #DIV/0!
Dome stic Claims Re se rve 0 0 #DIV/0!
Mate rial Damage s 0 0 #DIV/0!

Court Cases Reserve #DIV/0!


All Other Claims Reserve #DIV/0!
Pe rsonal Damage s 0 0 #DIV/0!
Court Cases Reserve #DIV/0!
All Other Claims Reserve #DIV/0!
Fore ign Claims Re se rve 0 0 #DIV/0!
Mate rial Damage s 0 0 #DIV/0!
Court Cases Reserve #DIV/0!
All Other Claims Reserve #DIV/0! 29
Pe rsonal Damage s 0 0 #DIV/0!
Court Cases Reserve #DIV/0!
All Other Claims Reserve #DIV/0!
Change in Reserve for Recoveries 0 0 #DIV/0!
Reserve for Recoveries EOP #DIV/0!
Reserve for Recoveries BOP #DIV/0!
Change in Reserve for ALAE 0 0 #DIV/0!
Reserve for ALAE EOP #DIV/0!
Reserve for ALAE BOP #DIV/0!
Change in Reserve for ULAE 0 0 #DIV/0!
Reserve for ULAE EOP #DIV/0!
Reserve for ULAE BOP #DIV/0!

Gross Loss Ratio - total losses incurred (paid and change in reserve) plus adjustment expenses
minus recoveries and divided by gross premium earned.

Gross Premium Earned (GPE) = Gross Written Premiums (GWP) + Unearned Premium Reserve
Begin of Period (Upr BOP) - Unearned Premium Reserve End of Period (Upr EOP)

Gross claims incurred: total losses incurred (paid and change in reserve) plus adjustment costs
minus recoveries

Gross Claims Paid: Total claims paid plus adjustment costs minus recoveries.

Change in Gross Claims Reserve = Claims reserve EOP – Claims reserve BOP

Recoveries Received- Money received from a third party for a claim which was settled by the
insurance company. The responsible for causing the loss is usually a third party. Subrogation
payment includes also the so called sanctions, i.e. cases when claim is settled from the MTPL
insurance, but part of the benefit is claimed from the insured person, because she/he caused the
loss due to improper conduct (e.g. alcohol).

ALAE - Allocated loss adjustment expenses are loss adjustment expenses that are assignable or
allocable to specific claims. It should be possible in the system to insert claims handling costs of
paid and pending claims.

It should be taken into account that this expenditure has the following statuses:

30
1. Expenses related to the concrete claim
2. Expenses that are assigned to product of final portfolio

Actually this information is stored in accounting software but not with such details that is the
need to have in claims module software. So a claim file must have a field specified for claims
handling cost.(Example for Expenses related to the concrete claim: A claim is in court and it is
outstanding with the value 100 Euro and after the court decision it is decided the claims will be
paid 90Eur and 10Eur are courts expenses. So the claim costs 100Eur but divided 90 for the claim
and 10 for the expenses)

Expenses that are assigned to product of final portfolio: for these expenses must have a module
where this information can be stored and used for the reports (these expenses are correlated
with date and type of policy: In 30.03.2015 TPL has 100 Euro etc.)

ULAE - Unallocated loss adjustment expenses are loss adjustment costs which are not claims-file
specific but are allocated as lump sums, usually for a line of business. These expenses also include
all internal administration and personal costs of the claims handler.

Unallocated expenses through products: for these expenses must have a module where this
information can be stored and used for the reports (these expenses are correlated with date: In
30.03.2015 it is 100 Euro etc.)

Paid claims – Claims paid during the selected period

Domestic claims paid- Claims paid and occurred within the state of Albania.

Foreign claims paid - Claims paid and occurred outside the state of Albania.

Material Damages - Claims with material damages.

Personal Damages- Claims resulting from injury of a person.

Court case claims- Claims that have had at least once the status Court Case

Non Court case claims- Claims that never had the status Court Case

31
The system must generate also reports that provide information concerning the average claims
per accident year, current period or previous periods, share of Run off to premiums, claims
frequency or run off analysis per line of business ect. As follows can be seen a similar report that
is being created for internal purposes from the Controlling. This report must be created
automatically from the system. All descriptions and definitions that are shown in the above
reports count for these report as well.

32
Gross Loss Ratio - Details
ALL Total
Mln 2013 2014 Deviation

Gross loss ratio 77.84% 55.82% -22.02%


Claims Payments to Premium
(accident year) CP 10% 10% 0%
RBNS to Premium (accident year) CP 7% 26% 19%
IBNR to Premium (accident year) CP 8% 8% 0%
Loss Ratio of Accident Year 25% 44% 19%

Share of Run-off to Premium


-50% -9% 40%
(accident year)

Loss Adjustment Costs to Premium


3% 3% 0%
(ALAE + ULAE)

Net Loss Ratio (in ALL) 109.71% 54.26% -55.45%

Average Earned Premium 19,487.7 21,051.8 1,564.2


Claims frequency AY 0.0 0.0 0.0
Average Paid Claim AY 57,878.4 64,690.1 6,811.7
Average Paid Claim total 184,240.0 219,406.3 35,166.2
Average Incurred Loss of Accident
Year without IBNR 112,955.4 241,838.8 128,883.4

Domestic Material Loss Ratio


Domestic Bodily Injury Loss Ratio
Foreign Material Loss Ratio
Foreign Bodily Injury Loss Ratio

No. of open claims BOP 1,156.0 1,393.0 237.0


Amount of open claims BOP 605.2
- 1,042.5 437.3
-
No. of new reported claims cp 3,529.0 3,780.0 251.0
Amount of new reported claims 1,044.0
- 775.3 (268.8)
-
No. of settled claims 3,293.0 3,377.0 84.0
Amount of settled claims 606.7
- 740.9
- 134.2
-
33
No. of refused & closed claims w/o payment - - -
Amount of refused & closed claims w/o payment -- 1.7 -1.7
No. of open claims EOP 1,392.0 1,796.0 404.0
Amount of open claims EOP 1,042.5 1,076.9 34.3
Court Cases
No. of open Court Cases BOP - -
Amount of open Court Cases BOP - -
No. of new reported claims Court Cases - -
Amount of new reported claims Cases -- --
No. of settled claims Court Cases 7.0 -
Amount of settled claims Court Cases 160.1
- 100.3
-
No. of refused & closed claims w/o payment Court
- Cases -
Amount of refused & closed claims w/o payment --Court Cases --
No. of open claims EOP Court Cases - -
Amount of open claims EOP Court Cases - -

Claims AY + Run Off Analysis


Claims paid AY 152.9 174.7 0.0
there of Compensation Fund
Claims handling Costs AY cp 45.9 47.9 2.0
Recoveries AY
RBNS AY EOP 99.6 430.6 331.0
IBNR AY EOP 122.4 130.4 8.0
Claims incurred AY 420.7 783.6 341.1

Claims paid PP 453.8 566.2 112.4


there of Compensation Fund
Claims handling Costs PP - -

Recoveries PP - -

RBNS PP BOP 605.2 1,042.5 437.3


RBNS PPY EOP 943.0 739.7 (203.3)

IBNR PP BOP 136.3 210.5 74.1


IBNR PP EOP 88.1 105.8 17.7

Claims incurred PP = run off 743.4 158.7 (584.7)


34
Similar to the above explained reports is also the VIG 2.0 report which is the official report that
is sent to VIG group and is used as a database for the controlling report. This report should be
available per line of business and in total.

35
#VALUE! Group 1 Group 2

Accident Insurance Health insurance

Pr e m ium
Direct earned premium 01.01.13 - 31.12.13 17,849,789.0 36,255,601.0

Paym e nts

Amount of all subclaims paid CP 1,531,624.0 20,587,041.0


for the subclaims occurred in PP 432,000.0 287,215.0
for the subclaims occurred in CP 1,099,624.0 20,299,826.0
Incoming payments f. subrogation and recoveries CP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Payments for court cases CP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Claims handling costs CP 75,498.0 1,170,453.8
Allocated subclaim adjustment costs paid in CP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Unallocated subclaims adjustment costs paid in CP 75,498.0 1,170,453.8
Pr ovis ions
IBNR as of BOP 4,500.0 804.4
IBNR as of EOP 88,500.0 88,650.0
for subclaims occurred in PP - -
for subclaims occurred in CP 88,500.0 88,650.0
RBNS as of BOP 22,500.0 39,687.0
Allocation to RBNS CP
Dissolution of RBNS CP
RBNS as of EOP 442,500.0 1,684,015.0
for unsettled subclaims occurred in PP - 7,400.0
for unsettled subclaims occurred in CP 442,500.0 1,676,615.0
Provisions for subrogation and recoveries BOP
Provisions for subrogation and recoveries EOP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Provisions for court cases as of BOP
Provisions for court cases as of EOP - -
for the subclaims occurred in PP - -
for the subclaims occurred in CP - -
Provisions for allocated subclaim adjustment costs BOP
Provisions for allocated subclaim adjustment costs EOP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Provisions for unallocated subclaims adjustment costs BOP
Provisions for unallocated subclaims adjustment costs EOP
Num be r of s ubclaim s
Number of all unsettled subclaims BOP - 15
Number of subclaims reported in CP 3 813
occurred in PP 1 11
occurred in CP 2 802
Number of expected IBNR subclaims - -
occurred in PP
occurred in CP
Number of subclaims settled in CP 3 796
occurred in PP 2 10
occurred in CP 1 786
Thereof subclaims without payments and reserves - -
occured in PP
occured in CP
Number of reopened subclaims EOP* - -
occurred in PP
occurred in CP
Number of unsettled subclaims EOP - 32

36
Subrogation and re cove rie s
Number of unsettled subrogation and recoveries BOP
Number of requested subrogation and recoveries CP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Number of settled subrogation and recoveries CP - -
for the subclaims occurred in PP
for the subclaims occurred in CP
Number of exposure units valid in the period 1,308 1,943
Court cas e s
Number of all open court cases BOP
Number of new court cases CP - -
occurred in PP - -
occurred in CP - -
Number of all settled court cases in CP - -
occurred in PP
occurred in CP
Number of open court cases EOP - -
Num be r of Eve nts
Number of events reported in CP 1 350
occurred in PP 4
occurred in CP 1 346

37
3.2.2 Court Case Claims Report

This table provides information regarding court case claims during a selected period, according
to accident year, line of business and type of damage.

38
1 2 3 4
Court Cases RBNS Reported Court Cases Paid Court Cases Court Cases RBNS as
LoB as on 31/12/2014 Claims 01-31/01/2015 Claims 01-31/01/2015 on 31.01.2015
No. Amount No. Amount No. Amount No. Amount
Casco 4 4,800,000 - - - - 4 4,800,000
Material 4 4,800,000 - - - - 4 4,800,000
2008 1 100,000 1 100,000
2009
2010
2011 1 300,000 1 300,000
2012 1 500,000 1 500,000
2013 1 3,900,000 1 3,900,000
2014
Border - - - - - - - -
Non-material - - - - - - - -
2009
Material - - - - - - - -
2011
MTPL 79 196,885,725 2 182,017 7 13,032,779 74 188,053,135
Non-material 71 187,667,982 1 9,821 6 12,860,583 66 178,835,392
2004 2 5,500,000 2 5,500,000
2005 1 3,561,966 1 3,561,966
2006 1 1,000,000 1 1,000,000
2007 8 7,112,000 1 1,837,508 7 5,412,000
2008 6 22,326,721 6 22,326,721
2009 9 17,190,116 1 2,199,527 8 19,750,116
2010 3 5,788,810 1 9,821 1 9,821 3 5,788,810
2011 7 18,051,321 7 18,051,321
2012 16 69,599,048 1 1,629,590 15 67,969,458
2013 8 22,512,000 2 7,184,137 6 14,449,000
2014 10 15,026,000 10 15,026,000
Material 8 9,217,743 1 172,196 1 172,196 8 9,217,743
2005 1 172,790 1 172,790
2009
2010
2011 4 7,204,953 4 7,204,953
2012 1 600,000 1 600,000
2013 2 1,240,000 2 1,240,000
2014 1 172,196 1 172,196
Travel Health Insurance 1 631,151 - - - - 1 631,151
Non-material 1 631,151 - - - - 1 631,151
2013 1 631,151 1 631,151
Guarante Insurance 1 15,000,000 - - - - 1 15,000,000
Material 1 15,000,000 - - - - 1 15,000,000
2008 1 15,000,000 1 15,000,000
Mortgage Insurance 2 26,791,840 - - - - 2 26,791,840
Material 2 26,791,840 - - - - 2 26,791,840
2010 1 100,000 1 100,000
2012 1 26,691,840 1 26,691,840
TOTAL 87 244,108,716 2 182,017 7 13,032,779 82 235,276,126

39
1- All the claims that in BOP had the status Court Case.

2- All the claims that during the selected period took the status Court Case

3- All the claims that in EOP changed the status form Court Case to Paid or partially paid .

4- All the claims that in EOP have the status Court Case. In this part should be included remaining
value of the reserve for court claim cases that have partial payment.

The table should be created according to Line of Business, type of damage and accident year.

3.2.3 Late Reported Claims

This table should be created according to Line of Business, and on a periodical basis.

1 2
Paid claims January Average RBNS as on 31.01.2015 Average
LoB No. Amount claim paid No. Amount RBNS as
MTPL 96 28,219,680 293,955 433 314,846,108 727,127
Green Card 18 4,254,259 236,348 235 549,132,468 2,336,734
Border 1 1,000,000 1,000,000 12 2,638,384 219,865
Casco 71 7,207,177 101,510 402 34,846,758 86,683
TOTAL 186 40,681,116 218,716 1,082 901,463,717 833,146

3 4 5 6
Reported claims Claims reported January 2015 according to accident year Total late reported IBNR as Average
LoB 2015 2014 2013 2012 2011 2010-2004 claims of IBNR as
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount 31.12.201 of
MTPL 101 0 52 45 3 1 49 0 -
Green Card 21 0 1 19 1 20 0 -
Border - 0 - 0 #DIV/0!
Casco 92 0 79 13 13 0 -
TOTAL 214 - 132 - 77 - 3 - - - 1 - 1 - 82 - - -

1- Claims paid during the period


2- Claims that in the end of the period don`t have the status Paid or closed

40
3- Claims reported during the period
4- The same information as 3, but divided according to accident year
5- Claims reported during the period but with accident year not as current year.

It is important to have the possibility to compare at least years, according to the selected
period.

3.2.4 Top 10 Claims

The Report is required in order to establish or renew the reinsurance contracts. Additionally it is
a good basis for analysing the status of any line of business in terms of risk spread on behalf of

reinsurance. The data is also essential in order to calculate the amount of a claim overtaken by
the reinsurance.

41
Claim Incurrence
Underw riting Year Insured Policy ID Line of business Type of damage Claim ID Cause of Claim Claim Status Paid 100% RBNS 100% Incurred 100%
Date

2014 GENC DHAMO 20235 Green Card Non-material 00641/14-3 Road accident 3/30/2014 Unsettled 1,080,734 1,080,734
2012 INDRIT DULA 591056 MTPL Non-material 00091/14-3 Road accident 5/6/2013 Unsettled 913,000 913,000
2014 ERJETA SHENAJ 64009 Green Card Material 00351/15 Road accident 1/13/2015 Unsettled 349,300 349,300
2011 Olti Hyskollari 525305 MTPL Non-material 00316/15 Road accident 6/17/2012 Unsettled 1,173,000 1,173,000
2014 ARTOR KONDAJ 22207 Green Card Material 00305/15 Road accident 1/18/2015 Unsettled 489,020 489,020
2014 SOKOL MALTRASHI 7861 Green Card Material 00304/15 Road accident 10/16/2014 Unsettled 489,020 489,020

2014 JASIN SULO 32596 Green Card Material 00303/15 Road accident 6/18/2014 Unsettled 279,440 279,440
2014 MERITAN OPARAKU 1102098 MTPL Material 00271/15 Road accident 10/30/2014 Unsettled 250,000 250,000
2015 EAGLE INVESTMENT 3 ALL Risk Material 00255/15 Theft 1/29/2015 Unsettled 362,822 362,822
2014 ARTUR QATO 27676 Casco Material 00250/15 Road accident 1/30/2015 Unsettled 300,000 300,000
Top 10 calims in total 5,686,337
Total claims reported 7,874,760
Share of total claims 72.21%

First choose the correct line of business. Then sort in ascending order all claims occurred within
the reporting period (e.g. from 1.1.2013 to 30.9.2013) according to their value (payments plus
provisions) and take the 10 claims with the highest amount. Write down into the appropriate
line of business the number of this claims, paid amount, amount of the estimated outstanding
payments (RBNS incl. recoveries and subrogation) as on the reporting date.

This report has been already requested from Edusoft.

42
3.2.5 Table 2 – Total Claims Overview

This table is composed of three parts. Each of them shows different information regarding
claims payment, RBNS or status. The current version installed in the claims system is not correct
and one of the tables is still missing.

1. For this report we need to reformulate the way we choose the period because not all the
columns can be defined by choosing an interval.

For example RBNS beginning of the period and RBNS end of the period represent values on a
specific date and not during a period. If we choose the period 01.01.2015-31.01.2015 the values
should be as below:

1- RBNS as on 31.12.2014

2- All claims reported during the period 01.01.2015-31.01.2015

3- All claims paid during the period. The name for this column should be PAID CLAIMS

4- All claims that during the period took the status `Closed` and have it until the end of the
period.

5- All the claims that in the end of the period don`t have the status `Paid` or `Closed`

43
Demet e raportuara-Total (1)
1 2 3 4 5
Avg no of Avg no of
PRODUCT RBNS BEGINNING OF PERIOD NEW CLAIMS PAID CLAIMS CLOSED CLAIMS RBNS END OF PERIOD days till days till
Payment Payment
Order
NO RBNS NO RBNS NO RBNS NO RBNS NO RBNS

MTPL 154 405940649.20 90 8167800.00 27 2243000.00 0 0.00 191 388,514,015 13 8

-Material 82 47186976.55 89 5992800.00 27 2243000.00 0 0.00 122 52004926.55 13 8

-Bodily injuries 70 301528020.65 1 2175000.00 0 0.00 0 0.00 67 279283436.65 0 0


Sigurimi i te gjitha rreziqeve ne
1 5393850.00 0 0.00 0 0.00 0 0.00 1 5393850.00 0 0
montim (EAR)-22
Sigurimi i Shendetit-18 0 5526489.13 99 0.00 9 1420566.79 0 0.00 0 2311643.99 4 3

Prona për efekte kredie - 10 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0

Policat Komplekse - 14 1 7285200.00 0 0.00 0 0.00 0 0.00 2 10883574.78 0 0

KASKO - 04 45 14154747.00 24 618966.00 3 152725.00 0 0.00 46 13693575.00 16 7

Sigurimi i pronës - 09 2 176013751.15 0 0.00 0 0.00 0 0.00 2 175786099.77 0 0

Aksidente personale - 08 1 6020000.00 4 140000.00 1 328558.30 0 0.00 2 6286533.00 9 0

Shëndeti në udhëtim - 05 9 5890857.75 1 17550.00 0 0.00 0 0.00 8 4166889.25 0 0

Sigurimi Shendetsor 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 0 0

Garanci kontrate - 07 0 2662015.00 0 0.00 0 0.00 0 0.00 0 2662015.00 0 0

Garanci oferte - 06 3 1148227.29 0 0.00 0 0.00 0 0.00 3 1148227.29 0 0

Karton Jeshil-02 143 230232780.99 9 3564044.87 1 897000.00 0 0.00 129 224784418.89 16 0

Malli gjatë transportit - 11 0 0.00 1 11292.54 0 0.00 0 0.00 1 11292.54 0 0

Kufitare - 03 2 23358803.00 1 88800.00 0 0.00 0 0.00 3 23388803.00 0 0

Total 513 1232342367.71 319 20776253.41 68 7284850.09 0 0.00 577 1190319300.91 71 26

2. The table provides information regarding RBNS on a date, and separates it according to the
difference between this date and the date when the claim was reported. So the aging structure
of RBNS is reflected.

44
PRODUCT RNBS Less than 1 month 1-3 months Over 3 months up to 1 year Older than 1 year

No. RBNS No. RBNS No. RBNS No. RBNS

MTPL 368173038.20 682,000 10704442.00 654,000 11356974.00 600,000 32310323.73 320,000 243680483.47

-Material 46091426.55 553,000 3875250.00 526,000 1282974.00 474,000 3921113.73 245,000 35504088.82

-Bodily injuries 264855959.65 116,000 6829192.00 115,000 10074000.00 113,000 28389210.00 73,000 154750742.65
Sigurimi i te gjitha rreziqeve ne
5393850.00 1,000 0.00 1,000 5393850.00 1,000 0.00 1,000 0.00
montim (EAR)-22
Sigurimi i Shendetit-18 2056318.09 9,000 90800.00 11,000 5296.32 14,000 1950151.77 16,000 10070.00

Prona për efekte kredie - 10 0.00 0,000 0.00 0,000 0.00 0,000 0.00 0,000 0.00

Policat Komplekse - 14 10883574.78 2,000 3598374.78 2,000 0.00 2,000 0.00 2,000 0.00

KASKO - 04 13343095.00 137,000 574565.00 142,000 505531.00 135,000 4462850.00 71,000 7800149.00

Sigurimi i pronës - 09 175786099.77 6,000 100000.00 6,000 2680500.00 5,000 0.00 3,000 173005599.77

Aksidente personale - 08 160000.00 4,000 140000.00 3,000 0.00 4,000 0.00 3,000 20000.00

Shëndeti në udhëtim - 05 4134449.25 37,000 0.00 23,000 990007.74 35,000 796247.11 28,000 2348194.40

Sigurimi Shendetsor 0.00 0,000 0.00 0,000 0.00 0,000 0.00 0,000 0.00

Garanci kontrate - 07 2662015.00 2,000 0.00 2,000 0.00 2,000 0.00 0,000 2662015.00

Garanci oferte - 06 1148227.29 5,000 0.00 5,000 0.00 5,000 0.00 3,000 1148227.29

Karton Jeshil-02 219293412.91 313,000 59508559.13 326,000 42292211.16 314,000 33519267.87 162,000 83346659.75

Malli gjatë transportit - 11 11292.54 1,000 11292.54 1,000 0.00 1,000 0.00 1,000 0.00

Kufitare - 03 23358803.00 15,000 0.00 15,000 0.00 13,000 2400000.00 3,000 18018803.00

Total 1137351562,03 1883.00 85432475,45 1832.00 74581344,22 1718.00 107749164,21 931.00 722295033,15

45
3.The last table gives information regarding paid claims, court cases or claims reopened during
the selected period. This table is still missing in the system.

1 2 3 4
CLAIMS PAID REOPENED COURT CASES
Parcial payment Total payment
PRODUCT
No of No of No of No of
No. Amount Claims Amount Claims Amount Claims Amount Claims RBNS
MTPL 414 131,244,586 5 15,224,528 409 116,020,058 1 - 43 130,773,274
- Material 373 31,261,365 2 42000 371 31,219,365 1 - 3 2,185,325
- Bodily injuries 41 99,983,222 3 15182528 38 84,800,694 40 128,587,949
- -
Casco 170 8,681,048 170 8,681,048
- -
Property 7 4,555,368 7 4,555,368
- -
Health 206 9,359,724 206 9,359,724 1 -
- -
Border 11 9,495,101 11 9,495,101
- -
Green Card 76 75,803,698 6 6324669.56 70 69,479,029 5 2,550,328
TOTAL 884 239,139,525 11 21,549,198 873 217,590,327 2 - 48 133,323,602

1- All claims paid during the selected period.

2- In this part the information for paid claims is separated in claims with total payment and claims
that have partial payment.

3- All claims that during the selected period at least once took the status reopened.

4- All the claims that in the end of the period have the status Court Case.

46
3.2.6 Claims paid during a period, according to accident year

This table is already installed in the system but the values are not correct.

This report should provide information regarding paid claims during a period, according to the
accident year.

47
Demet e paguara sipas viteve - Total
MAREVESHJA E RISIGURIMIT Aksidente personale - 08 Quota Share

Aksidente personale - 08 accidental year bases - Data e ndodhjes se demit


ALL EUR USD TOTAL in ALL
Aksidente personale - 08 Demet e paguara nga 01.01.2015- 31.01.2015

Ndodhur 2015 328558.30 0.00 0.00 328558.30

MAREVESHJA E RISIGURIMIT Karton Jeshil-02 Quota Share

Karton Jeshil-02 accidental year bases - Data e ndodhjes se demit


ALL EUR USD TOTAL in ALL
Karton Jeshil-02 Demet e paguara nga 01.01.2015- 31.01.2015

Ndodhur 2014 897000.00 21175.62 0.00 3864551.40


Ndodhur 2013 0.00 5540.05 0.00 771234.05

MAREVESHJA E RISIGURIMIT TPL - 01 Quota Share

TPL - 01 accidental year bases - Data e ndodhjes se demit


ALL EUR USD TOTAL in ALL
TPL - 01 Demet e paguara nga 01.01.2015- 31.01.2015

Ndodhur 2015 1048250.00 0.00 0.00 1048250.00


Ndodhur 2010 894116.00 0.00 0.00 894116.00
Ndodhur 2012 2391000.00 0.00 0.00 2391000.00
Ndodhur 2013 1069370.00 0.00 0.00 1069370.00
Ndodhur 2014 7385081.00 0.00 0.00 7385081.00

48
3.2.7 Claims reported during a period, according to line of business

This table provides information regarding claims reported during a period, according to line of
business and the status of the claims.

Demet e raportuara ne interval Totale


Reported claims
01.01.2015-31.01.2015
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Ratio Claims
Average Average Average Average Average
Nr Klasa Earned P remium Claims/P rem Frequency Reported Claims P aid Claims Outstanding Claims Approved Claims Unsettled Claims Refused Claims Closed Claims
claim claim claim claim claim
ium (100)
No Amount Amount Amount No Amount Amount No Amount Amount No Amount No No Amount Amount No Amount Amount No Amount No Amount
73,967,945. 2,243,000.0
1 TPL Material 4,730 3.00 167.00 79.00 28,392.41 0,000 1054000.00 0.00 79,000 1189000.00 15050.63 27 1189000.00 44,037.04 52 0 0.00 0 0.00
00 0
73,967,945.
2 TPL Non-materiale 4,730 0.00 2.00 1.00 0.00 0.00 0,000 0.00 0.00 1,000 0.00 0.00 0 0.00 0.00 1 0 0.00 0 0.00
00
73,967,945.
3 -Paaftesi e perhershme e pjeseshme 4,730 0.00 2.00 1.00 0.00 0.00 0,000 0.00 0.00 1,000 0.00 0.00 0 0.00 0.00 1 0 0.00 0 0.00
00
73,967,945. 2,243,000.0
4 TPL - 01 4,730 3.00 169.00 80.00 28,037.50 0,000 1054000.00 0.00 80,000 1189000.00 14862.50 27 1189000.00 44,037.04 53 0 0.00 0 0.00
00 0
5 Karton Jeshil-02 1,525 108,090.00 830.00 59.00 9.00 897,000.00 99,666.67 0,000 897000.00 0.00 9,000 0.00 0.00 1 0.00 0.00 8 0 0.00 0 0.00
6 -Other 1,525 108,090.00 830.00 59.00 9.00 897,000.00 99,666.67 0,000 897000.00 0.00 9,000 0.00 0.00 1 0.00 0.00 8 0 0.00 0 0.00
7 Kufitare - 03 372 19,962.00 0.00 27.00 1.00 0.00 0.00 0,000 0.00 0.00 1,000 0.00 0.00 0 0.00 0.00 1 0 0.00 0 0.00
8 KASKO - 04 73 313,882.00 49.00 2603.00 19.00 152,725.00 8,038.16 0,000 152725.00 0.00 19,000 0.00 0.00 3 0.00 0.00 16 0 0.00 0 0.00
9 Shëndeti në udhëtim - 05 1,897 8,787.00 0.00 5.00 1.00 0.00 0.00 0,000 0.00 0.00 1,000 0.00 0.00 0 0.00 0.00 1 0 0.00 0 0.00

10 Aksidente personale - 08 180 4,031,685.00 8.00 111.00 2.00 328,558.30 164,279.15 0,000 328558.30 0.00 2,000 0.00 0.00 1 0.00 0.00 1 0 0.00 0 0.00

11 Malli gjatë transportit - 11 9 11600.00 0.00 1111.00 1.00 0.00 0.00 0,000 0.00 0.00 1,000 0.00 0.00 0 0.00 0.00 1 0 0.00 0 0.00

12 Sigurimi i Shendetit-18 19 37,251.50 3813.00 4737.00 9.00 1,420,566.79 157,840.75 0,000 1420566.79 0.00 9,000 0.00 0.00 9 0.00 0.00 0 0 0.00 0 0.00

1-Number of exposure units (see definition in paragraph 7.1) and earned premium (see
definition in paragraph 6.1.1) for the period.

2-Amount of total claims reported during the period / Amount of premium from the policies
issued during the period.

3-(Number of total claims reported during the period/ number of exposure unit in the period) x
100

49
4-Total claims reported during the period. This value should be equal to 6+8+15

5-Average reported Claim: Amount of reported claims / number of reported claims

6-Claims paid during the period. For the partial payments only the paid part should be added.

7-Average claim paid: Amount of claims paid / number of claims paid

8-All the claims reported during the period and that in the end of the period don`t have the
status `paid` or `closed`. This should be equal to 10+12+1

9- Average outstanding claim: Amount of outstanding claims / number of outstanding claims

10-All the claims reported during the period and that in the end of the period have the status
`Approved for payment`, this are claims approved to be paid but not paid yet. The claims with
status Partial payment should be added for the remaining unpaid part that is in the reserve.

11-Average approved claim: Amount of approved claims / number of approved claims

12-All the claims reported during the period and that in the end of the period don`t have the
status `Approved for payment`, `Paid`, `Partially paid`, Refused claim request or closed.

13-Average unsettled claim: Amount of unsettled claims / number of unsettled claims

14-All the claims reported during the period and that in the end of the period have the status
`Refused claim request`

15-All the claims reported during the period and that in the end of the period have the status
`Closed`

This table is already installed in the system but the values are not correct.

3.2.8 Property Claims Report

Actually the table is created by the system on a period basis and is not correct. It should provide
information regarding the claims on a certain date, according to line of business.

50
UWY 2012 Insured Policy number Insured risc Claim no. Sum insured / PML Currency Cause of loss Date of loss

2013 OMEGA PHARMA GROUP 29562 Garanci Oferte 01110/13 326562.60 LEK 03.10.2013

2013 OLG PROJECT 61851 Kontrate sigurimi prone 00343/14 1250000.00 EUR Vjedhje 16.02.2014

2013 OMEGA PHARMA GROUP 29881 Garanci Oferte 01111/13 371846.86 LEK 03.10.2013

2013 OMEGA PHARMA GROUP 29883 Garanci Oferte 01112/13 57913.83 LEK 03.10.2013

2014 TOBACCO HOLDING GROUP SHPK 62104 Kontrate sigurimi prone 01587/14 100000.00 EUR Vjedhje 07.12.2014

2014 O.E.S DISTRIMED 934 Malli në transport 00082/15 1380.00 USD Humbja e mallit 18.12.2014

2014 16 EAR 01519/14 28938189.89 EUR Aksident ne pune 31.10.2014

2014 15 Polica Komplekse 01588/14 12091009.00 EUR Rreshqitje toke 11.12.2014

3.2.9 MTPL Claims Report

51
This report provides information regarding MTPL non-material claims paid during a period and
RBNS in EOP, according to accident year, type of damage and status of the claim. The table is
created based on comparison between two years, at least.

MPTL Non Material Claims Paid


MTPL Non-material claims paid 2013 MTPL Non-material claims paid 2014
Type of damage/
Non-Court Case claims Court Case claims Total Non-Court Case claims Court Case claims Total
Reporting year
No. Paid Amount No. Paid Amount No. Paid Amount No. Paid Amount No. Paid Amount No. Paid Amount
Death 16 50,067,269 8 41,992,490 24 92,059,759 9 17,629,189 10 57,403,168 19 75,032,357
2006 - - 1 19,290,924 1 19,290,924
2007 - - 1 9,101,744 1 9,101,744
2008 - - - -
2009 1 4,000,000 3 14,200,000 4 18,200,000 2 5,165,500 2 5,165,500
2010 - - 1 5,600,000 1 5,600,000
2011 4 25,792,490 4 25,792,490 - -
2012 8 21,296,335 1 2,000,000 9 23,296,335 3 2,450,000 3 2,450,000
2013 7 24,770,934 7 24,770,934 2 5,051,189 5 18,245,000 7 23,296,189
2014 - - 4 10,128,000 4 10,128,000
Disability 43 65,866,709 13 83,322,586 56 149,189,295 30 24,313,672 9 44,270,188 39 68,583,860
2006 - - - -
2007 2 21,133,535 2 21,133,535 1 1791100 1 1,791,100
2008 2 8,634,456 2 8,634,456 - -
2009 1 20,000,000 1 20,000,000 - -
2010 1 771,622 1 771,622 1 3,773,528 1 3,773,528
2011 1 1,600,000 2 3,654,595 3 5,254,595 2 332,168 1 8,087,500 3 8,419,668
2012 26 50,025,452 6 29,900,000 32 79,925,452 10 3,126,545 1 13,212,000 11 16,338,545
2013 15 13,469,635 15 13,469,635 6 6,857,923 3 7,700,000 9 14,557,923
2014 - - 11 12,205,936 3 11,497,160 14 23,703,096
Grand Total 59 115,933,978 21 125,315,076 80 241,249,054 39 41,942,861 19 101,673,356 58 143,616,217

MPTL Non-material claims - RBNS

52
MTPL Non-material claims - RBNS as on 31/12/2013 MTPL Non-material claims - RBNS as on 31/12/2014
Type of damage/
Non-Court Case claims Court Case claims Total Non-Court Case claims Court Case claims Total
Reporting year
No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount
Death 18 52,453,000 31 189,891,006 49 242,344,006 12 35,390,952 30 77,403,954 42 112,794,906
2004 1 1,000,000 1 1,000,000 1 1,000,000 1 1,000,000
2005 - - 1 3,561,966 1 3,561,966
2006 2 16,976,759 2 16,976,759 - -
2007 2 26,616,660 2 26,616,660 5 3,000,000 5 3,000,000
2008 1 500,000 1 500,000 - -
2009 3 9,165,500 3 5,243,952 6 14,409,452 1 2,000,000 3 5,243,952 4 7,243,952
2010 3 20,773,000 3 20,773,000 2 500,000 2 500,000
2011 4 5,225,500 3 30,062,000 7 35,287,500 - -
2012 4 11,236,000 3 20,650,000 7 31,886,000 2 8,167,310 5 26,376,401 7 34,543,711
2013 7 26,826,000 13 68,068,635 20 94,894,635 3 6,657,283 8 17,781,635 11 24,438,918
2014 - - 6 18,566,359 5 19,940,000 11 38,506,359
Disability 50 51,294,452 28 63,822,290 78 115,116,742 36 24,919,208 41 110,264,028 77 135,183,236
2004 - - - -
2006 - - - -
2007 1 2,113,700 1 2,113,700 - -
2008 1 500,000 1 500,000 1 500,000 1 500,000
2009 2 1,200,000 4 15,412,000 6 16,612,000 4 19,694,769 4 19,694,769
2010 3 468,240 1 3,573,000 4 4,041,240 1 168,168 1 3,190,116 2 3,358,284
2011 7 2,739,301 8 13,492,700 15 16,232,001 2 186,246 3 9,788,146 5 9,974,392
2012 15 36,941,282 8 9,784,590 23 46,725,872 4 3,575,712 7 39,698,853 11 43,274,565
2013 22 7,831,930 6 21,060,000 28 28,891,930 7 2,189,445 10 11,413,144 17 13,602,589
2014 - - 22 18,799,637 15 25,979,000 37 44,778,637
Grand Total 68 103,747,452 59 253,713,296 127 357,460,748 48 60,310,160 71 187,667,982 119 247,978,142

Court Case claims – claims that had court case status at least once

Non court case claim – claims that never had court case status.

3.2.10 RBNS History report

This report should provide information regarding the development of RBNS, from initial reserve
of reporting date to the final reserve for payment approval, according to all the changes to the
status and the reserve to each claim.

3.3 Analytic Claims Reports

53
3.3.1 Paid Claims comparison according to type of damage
This report should provide the possibility to extract a comparison report between three years,
but with the possibility to choose the period (e.g. 01.01 – 30.09). For the moment this is a
yearly report.

3.3.2 Paid claims comparison according to the Branch


This report should provide the possibility to extract a comparison report between three years,
but with the possibility to choose the period, (e.g. 01.01 – 30.09). For the moment this is a
yearly report. It is very important to have the possibility to choose between the Branch that
issued the policy and the Branch which reported the claim.

3.3.3 Paid claims comparison according to line of business


This report should provide the possibility to extract a comparison report between three years,
but with the possibility to choose the period, (e.g. 01.01 – 30.09). For the moment this is a
yearly report.

3.3.4 Settled claims comparison according to type of damage


This report should provide the information in number and value for settled claims during a
period, according to the type of damage. The system should create a comparison report
between three years.

3.3.5 Settled claims comparison according to the Branch


This report should provide the information in number and value for settled claims during a
period, according to the branch that issued the policy or to the branch that reported the claim.
This means that we should have the possibility to choose these two categories of branches. The
system should create a comparison report between three years.

54
3.3.6 Settled claims comparison according to line of business
This report should provide the information in number and value for settled claims during a
period, according to the line of business. The system should create a comparison report
between three years.

3.3.7 Outstanding Claims report


This report should provide information regarding RBNS, in number and value, according to
branches and line of business. The system should provide the possibility to choose the period
and should create a comparison between several years.

3.3.8 Reported claims


This report should provide the information, in number and value, for claims reported in a
period and according to their status in the end of the period (e.g. paid, settled and
outstanding).

3.3.9 MTPL Claims according to the type of damage


This report should provide information, in number and value, for MTPL claims reported during a
period and according to the type of damage (e.g. material, non-material, death and disability).
The report should provide the total value of a claim, regardless of the claim status.

All the existing analytical reports in the system need to be verified and controlled in order to
have correct figures.

55
3.4 Efficiency KPIs Claims Handling

The following KPIs should be available for the total Claims Handling Department as well as per
employee in order to evaluate efficiency of the claims handling processes on a regular basis and
to compare periodically.

1. Settlement Ratio: No. of settled claims of current AY related to no. of reported claims of current
AY
2. No. of unsettled claims from previous years in relation to no. of reported claims in previous
years
3. Average duration of claims settlement in current AY from date of document collection
completed to date of settlement
4. No. of complaints in current AY related to no. of reported claims in current AY
5. No. of reopened claims during reporting period
6. Run off result
7. Amount of average claim incurred in current AY compared to current AY of previous period
(t-1)

56
57
3.5 List of Requirements

1. The notification regarding the compare between reporting date and accident date is not
totally correct. It seems that it compares only the days, not month and year. Already
requested from EDU soft.
2. The payment order need to be corrected, because near the information of bank account
should be the name of the person who will take the money (shfrytezuesi i mjeteve
monetare). Already requested from EDU soft.
3. All the reports should have a column with information regarding the client that bought the
insurance policy.
4. It is important to have in the system the possibility to treat recoveries- amount received
back from claims.
5. Search module sometimes does not find a claim that is already registered.
6. Until now all the reports were created using the concept of a claim. Now we need to create
a new report using the concept of claim event (reported, paid and RBNS).
7. In all reports we need the column with the date when a claim changes the status to refused/
closed/court case.
8. Import the old claims files.
9. We need to have the possibility to check in the system if the premium has been paid.
10. It is important for us to have in the system the possibility to identify the claims happened
from the same Natural catastrophe event. This is very important for claims department and
reinsurance.
11. For all claims reported from 01.01.2015 Vat value will be added to the claim value. For
this purpose we need to include vat value to the evaluation form.
12. It is necessary to reorganize the way we choose the covered risk during the claim
registration. In this section should appear only the insured risks of each policy.
13. Final/Partial payments in the claims payment module. At the moment the type of payment
is selected manually by the operator in the payment module, but it should be automatic
according to the value registered, in order to avoid mistakes.
14. We need to have the possibility to choose the language of the reports Albanian or English.
15. In the Search module we want to have the possibility to export the information in excel.
16. We need to receive detailed notification for each system update, in order to be informed
regarding this updates and control them.
17. It is necessary to have the possibility to change the currency of a claim.

58
59
4 Actuarial Management

The actuarial department or the actuary is responsible for collecting all relevant information, that
goes into the sufficient calculation of premium for covering a company’s insurance policy,
determining the adequacy of reserves to meet the company obligations to policyholders under
the contract they have issued, development of new policies that will be of benefit to the insurer
and assist corporate management in developing the strategic plan.

The involvement of actuarial data and calculations in the system is very important since they are
required to calculate the adequacy of the technical provisions and other liabilities, insurer’s
prospective solvency position, insurer’s actuarial and financial risks, underwriting policies etc,
which are essential in an insurance company. Therefore, the requirements of actuarial module
are as follows:

4.1 Requirements from Actuarial Management Module


 The integration of the unearned premium reserve calculation(UPR) for each policy

The calculation formula is: in a given date, for each policy are calculated the remaining days and
based on this the proportional premium for the remaining period. Special care must be taken
on policies with installment.

 The integration of the unearned premium reserve reinsurer(UPR-RE) for each policy

The calculation formula is the same with the above explained formula but for calculations it is
used the premium ceded to reinsurer. This is directly connected with the reinsurance module.

 Claims Reserve IBNR and IBNR-re

60
For this reserves, IBNR (incurred but not reported) and IBNR-re (reinsurance share on incurred
bit not reported), it is needed a module where this value can be inserted in a given date per each
product and the system must provide the possibility to divide this reserve in accident years. The
value for this reserve will be calculated out of the system and the need is only to store it in the
system so it can be used in reports.

Example: On 31.03.2015 the IBNR for TPL is 140 million, which is composed of 50 million from
2015, 30 million from 2014, 20 million from 2013 and the rest belongs to previous years.
(Illustration on the table below)

Accident Ibnr of TPL Ibnr of Green Ibnr of ……….. Total IBNR


Year @31.03.2015 Card Property @31.03.2015
@31.03.2015 @31.03.2015
2015 50 20 5 75
2014 30 20 5 55
2013 20 30 5 55
……. 40 10 5 55
Total 140 80 20 240

Accident Ibnr-RE of TPL Ibnr-RE of Ibnr-RE of ……….. Total IBNR-RE


Year @31.03.2015 Green Card Property @31.03.2015
@31.03.2015 @31.03.2015
2015 50 20 5 75
2014 30 20 5 55
2013 20 30 5 55
……. 40 10 5 55
Total 140 80 20 240

61
 Pending claims reserve RBNS and RBNS-re

RBNS is the pending claims reserves which already is in the system and can be automatically
shown and used.

AS for RBNS-re, if the reinsurance module defines the reinsurer part for each pending claim than
it is possible to be generated automatically from the system. Otherwise, it is needed a module
where values for each product in a given date can be inserted.

 Exposure unit calculation based on the number of policies (no. of counting)

Exposure unit derives from a calculation that is unique and individual for each policy.

The calculation formula is: for a given period are calculated how many days of the validity of the
policy belong to this period. This value is divided by 365 to return in years as a measure.

(Example: The period is 01.01.2015 – 31.12.2015 so the exposure on one policy starting
01.10.2014 -30.09.2015 is 01.01.2015-30.09.2015 converted in days 272 and divide by 365 is
0.75. Conclusion this policy is not counted as 1 policy but as 0.75 policy.)

62
5 Reinsurance Management
Type of the reinsurance:

Reinsurance treaties- offering coverage for different portfolio;

Facultative Reinsurance- Offering Coverage for each and every case

Coverage:

Underwriting Year Bases- Covering insurance policies issued during reinsurance period

Accidental Year Bases- Covering claims happened during the reinsurance period

Form:

Proportional- Quota Share & Surplus

Non Proportional- XL

5.1 Underwriting Year Bases, Quota share


Maximum limit: Maximum possible sum insured for each and every policy covered
by this treaty: e.g 500,000 Euro

Quota: Percentage ceded to the reinsurer: e.g 50%

Line of business: Each and every type of policy included in the treaty Fire & Commented [NO1]: Could you please define in more details
the provisional commission? Is this a commission that is PAID TO
Additional Perils, All risks, Komplekse, Kredite, Theft, CAR, EAR, MI, the reinsurance company or..?
some kind of liabilities, Bonds (possibility to choose the line of Commented [EB2]: Reinsurance Commission is Commission
business). that Insurance company get from the reinsurer so insurance.
Commented [NO3]: Is this commission related with provisional
Provisional Commission: Fix commission during the year: e.g 55% commission and how? Could you provide simple examples? What
about the range between 20% and 70% of loss ratio? (

Sliding Scale Commission: Recalculating commission at the end of the year related with loss Commented [EB4]: Provisional commission is calculated each
and every quota/month. At the end of the year there is recalculated
ratio of this treaty: e.g 15% for loss ratio 70% or higher up to 65% reinsurance commission based on the loss ratio of portfolio (all line
of business including on this reinsurance treaty) (Example 1)
for loss ratio 20% or lower.
Commented [NO5]: Could you please define in more details
the profit commission? Is this a commission that is RECEIVED from
Profit commission: If reinsurance net result of reinsurance treaty is with profit at the reinsurance company if the treaty is with profit?
end of the year is calculated profit commission on it. Percentage of Commented [EB6]: It is received from Insurance Company
when the reinsurance treaty is with profit. Even this is calculated at
it is decided at the beginning of the year: e.g 65% the end of the year and recalculated until there will not be more
changes in reserves because it is related with the loss ratio as well.
(Example 2)

63
Management expenses: Reinsurer expenses for the treaty decided at beginning of the year:
e.g 5%

Claims happened from insurance policies issued during the treaty year.

Calculations:

For each and every policy with sum insured 500,000 Euro calculate reinsurance sum reinsured
and reinsurance premium.

Before this we should have the possibility to calculate PML (probable maximum loss) for separate
polices. In most cases PML is equal to Sum insured but there are some cases where is less than
and the calculation must be in % or absolute value.

Because of this change the maximum limit and premium for calculation purpose.

EG.

Type of policy: Fire & allied perils

Sum insured: 1,000,000 Euro

Primi: 5,000 Euro

PML: 80%

Maximum possible loss: 1,000,000 * 80% = 800,000 Euro

Premium for this: 5,000 *80% = 4,000 Euro

This will be Insurance figures for reinsurance calculations.

After that will be calculated Ceded Reinsurance Premium (as you have done on your
presentation) deducting first the Taxes which are different for Albanian 1,5% and for Kosovo
6,5%.

Provisional Commission: As % of Ceded Premium


Commented [NO7]: An example calculation for claims would
be appreciated, so that we can determine that our assumptions are
For the same account should be calculated reinsurance part of claims which might be claims paid correct.
or RBNS. Commented [EB8]: Example 3
Commented [NO9]: What is the bases for taking claims in
Claims happened to polices issued during treaty year (e.g 2013) for lines of business covered from consideration for specific treaty? UWY of policy or Date of
Accident?
the Reinsurance Treaty with sum insured up to 500,000 Euro will share in the same way as
Commented [EB10]: Property QS & Surplus are on
premium. (please attached Property Claims template) Underwriting year bases. Because the treaty is on Underwriting
Year Bases.

64
Open balance for each and every quota will be:
Reinsurance Balance - Quota Share Treaty 4 Quarter 2012

This balance sheet contains 100% UY 2012 Exchange Rate

Premium paid/ Commission/ Claims paid/ Reserves 1 EUR = LEK

139.59

u/y payment risk XXX XXX

ALL EUR

Property - Material
2012 a.) premium Damage 6,553,396.08 46,947.46

Property -
2012 a.) premium Burglary/Robbery 40,597.38 290.83

Engineering -
2012 a.) premium CAR/EAR 96,267.00 689.64

Engineering -
Machinery
2012 a.) premium Breakdown 0.00

2012 a.) premium All Risk 1,380,774.00 9,891.64

2012 a.) premium Liability 103,673.68 742.70

8,174,708.14 58,562.28

60%

Property - Material
2012 b.) commission Damage 3,932,037.65 28,168.48 Commented [NO11]: Is this provisional commission as 60% of
the premium?
Property -
2012 b.) commission Burglary/Robbery 24,358.43 174.50 Commented [EB12]: Yes it might be different for different
years. Related with the contract.
Engineering -
2012 b.) commission CAR/EAR 57,760.20 413.78

Engineering -
Machinery
2012 b.) commission Breakdown 0.00 0.00

2012 b.) commission All Risk 828,464.40 5,934.98

2012 b.) commission Liability 62,204.21 445.62

4,904,824.88 35,137.37

65
Property - Material
2012 c.) claims paid Damage 301,049.40 2,156.67 Commented [NO13]: Do you take in consideration the actual
paid claims or the settled claims transferred to accounting for
Property - payment?
2012 c.) claims paid Burglary/Robbery 0.00 0.00
Commented [EB14]: Paid claims during the period for the
Engineering - polices Underwrites on 2012 for this case.
2012 c.) claims paid CAR/EAR 0.00 0.00

Engineering -
Machinery
2012 c.) claims paid Breakdown 0.00 0.00

2012 c.) claims paid All Risk 0.00 0.00

2012 c.) claims paid Liability 63,000.00 451.32

364,049.40 2,607.99

Open balance 4 Quarter 2012 2,905,833.86 20,816.92

Property - Material
2012 d.) outstanding losses Damage 49,030.45 351.25 Commented [NO15]: You refer here to reported but not
settled claims (RBNS) or IBNR?
Property -
2012 d.) outstanding losses Burglary/Robbery 189,000.00 1,353.97 Commented [EB16]: RBNS only for Reinsurance part. Please
see example 3.
Engineering -
2012 d.) outstanding losses CAR/EAR 0.00 0.00

Engineering -
Machinery
2012 d.) outstanding losses Breakdown 0.00 0.00

2012 d.) outstanding losses All Risk 0.00 0.00

2012 d.) outstanding losses Liability 302,400.00 2,166.34

540,430.45 3,871.56

Property - Material
2012 d.) IBNRS Damage 0 Commented [EB17]: IBNR only for reinsurance part.

Property -
2012 d.) IBNRS Burglary/Robbery 0

Engineering -
2012 d.) IBNRS CAR/EAR 0

66
Engineering -
Machinery
2012 d.) IBNRS Breakdown 0

2012 d.) IBNRS All Risk 0

2012 d.) IBNRS Liability 0

0.00 0.00

This Open balance will start at the moment that treaty start and will finished when each and
every claim reported under this treaty will be paid. Generally are prepared on quarterly bases
but it might need to be monthly as well.

At the end of the year will be calculated Sliding Scale Commission & Profit Commission which are
conditions of this contract. The calculations are based in written premium, Claims Paid, UPR, Commented [NO18]: The table below takes in consideration
Collected Premium. Is it written or collected?
RBNS, IBNR, Provisional Commission and depending of Loss ratio of portfolio recalculated final
Commented [EB19]: Will be written for the next year.
commission (SSC) and profit commission. As follows:

Accounting Year
ADJUSTMENT SLIDING SCALE COMMISSION
UWY 2013 Commented [NO20]: Could you provide us with this excel
including the formulas? We could not found it in the supplied
as at 31.12.2013 documentation.
Also it would be best if you could provide us with calculation details
for all parameters within one column of this report (Loss Ratio,
Preliminary commission, SS commission). IBNR is calculated by the
actuary and can be found in a specific account in your accounting
application?

Currency EUR EUR EUR

Property Liability
Sliding scale commission QS QS Total QS Commented [EB21]: Example 2

UWY 2013 2013 2013

178,153. 183,196.
Premium (collected) 42 5,043.00 42

Unearned premium as at 01.01.2013 0.00 0.00 0.00

81,936.9 84,787.0
Unearned premium as at 31.12.2013 6 2,850.06 2

67
Paid Losses 808.32 0.00 808.32 Commented [NO22]: Paid claims?
Commented [EB23]: Yes only for reinsurance part and
O/L as at 01.01.2013 0.00 0.00 0.00 underwriting your 2013

IBNR as at 01.01.2013 0.00 0.00 0.00

O/L as at 31.12.2013 4,100.55 718.97 4,819.52

IBNR as at 31.12.2013 0.00 0.00 0.00

Loss Ratio = ((D+(G+H)-(E+F))/(A+B-C) 5.10% 32.79% 5.72% Commented [NO24]: Please provide a specific example of Loss
Ratio calculation. What are all parameters taken in consideration
%Preliminary commission 65.0% 65.0% 65.0% and how it is calculated?
Commented [EB25]: Example 2
62,540.7 63,966.1
Preliminary Commission 0 1,425.41 1

Adjustment of Comm. In % According to Loss Ratio 65.62% 37.93% 65.00%

63,137.2 63,966.1
Sliding scale Commission 2013 4 828.87 1

Commission adjustment 596.54 -596.54 0.00

63,137.2 63,966.1
Total commission 2013 4 828.87 1

Property sliding scale:

Max_comm 65% Commented [NO26]: How do you determine min and max
commission and loss ratio? To which commission do you refer in
Min_comm 25% this case?
Commented [EB27]: This is sliding scale commission is have
Max_LR 60% explain you how does it work on example 1.

Min_LR 20%

PROFIT COMMISSION UWY 2013


as at 31.12.2013

68
Currency EUR EUR EUR

Profit commission calculation Property QS Liability QS Total QS

UWY 2013 2013 2013

Income

Premium (written) 178,153.42 5,043.00 183,196.42

Unearned premium as at 01.01.2013 0.00 0.00 0.00

O/L as at 01.01.2013 0.00 0.00 0.00

IBNR as at 01.01.2013 0.00 0.00 0.00

Total income 178,153.42 5,043.00 183,196.42

Outgoings

Unearned premium as at 31.12.2013 81,936.96 2,850.06 84,787.02

Paid Losses 808.32 0.00 808.32

O/L as at 31.12.2013 4,100.55 718.97 4,819.52

IBNR as at 31.12.2013 0.00 0.00 0.00

Adjusted commission % 65.62% 37.93% 65%

Commission (on Premium written- unearned) 63,137.24 828.87 63,966.11

Total outgoings 149,983.07 4,397.90 154,380.97

Profit (+), Loss (-) 28,170.35 645.10 28,815.45

0.05 0.05 0.05


Management expenses (on premium income) 8,907.67 252.15 9,159.82

Profit after ME 19,262.68 392.95 19,655.63


70% 70% 70%
Profit commission INTALB 13,483.87 275.06 13,758.94

69
This calculation will be for each and every year until the claims will be paid totally. The calculation
of Reisnurance UPR is done from actuary. Commented [NO28]: Where is this information stored? We
presume in a specific Account in your Accounting system?
This question also applies for IBNR (calculated we presume)
5.2 Bond Reinsurance Treaty Commented [EB29]: It is not store in the system but we can
put it manually. As we get it for each and every reinsurance treaty
Bonds Reinsurance Treaty change from the normal QS because the maximum capacity is on on accounting system there is in total.

Variable QS. So for the limit of 1,000,000 Euro let say Quota is 75% so the retention of the
company is 250,000 Euro.

For the limit between 1,000,000-2,000,000 Quota is different in that way that retention should
not be higher than 250,000 Euro. For this polices with different quota will apply different share
on Premiums & claims as well. Commented [NO30]: Could you please send us one specific
scenario like example for two different cases e.g. 500000 SI and
1500000 SI?
After doing all this calculations we find out reports on Treaty Year Bases and Accounting Year
We need scenario like examples since those are better for us for
Bases understanding and formulating the process and the calculation
steps.

5.3 Underwriting Year Bases, Surplus Commented [EB31]: Example 4

Maximum limit: 20,000,000 Euro divided in 20 lines

Retention one line: 500,000 Euro

Reinsurer limit 19 line: 19,500,000 Euro

Line of business: Fire & Additional Perils, All risks, Komplekse, Kredite, Theft, CAR,
EAR, MI, (possibilities to choose the line of business). We should
have the possibility to include or exclude different lines of business.

Fix Commission: 39% Commented [NO32]: Could you please define in more details
the fixed commission? Is this a commission that is PAID TO the
reinsurance company or..?
It might happen to include on the treaty of next year profit commission or Sliding Scale
Commented [EB33]: The same as provisional commission
Commission so even this treaty should have the possibility to choose what type of commissions
will be applied and their percentage. (Sliding Scale Commission: Profit commission: Management
expenses: )

Claims happened from insurance policies which are covered from the treaty with sum insured
higher than 500,000 Euro issued during the treaty year.

Calculations:

For each and every policy with sum insured higher than 500,000 Euro calculate reinsurance sum
reinsured and reinsurance premium.

70
The same as Quota Share, before this we should have the possibility to calculate PML (probable Commented [NO34]: We should presume that in this case also
the PML will be used as basis for calculating the ceded premium?
maximum loss) for separate polices.
Commented [EB35]: Yes was explain to Quota Share above.

After that will be calculated Ceded Reinsurance Premium for the part of sum insured higher than
500,000 Euro (same as you have calculated on your presentation) after deducted Taxes which
are different for Albanian 1,5% and for Kosovo 6,5%.

Fix Commission: As % of Ceded Premium

For the same account should be calculated reinsurance part of claims which might be claims paid Commented [NO36]: An scenario like example calculation for
claims would be appreciated, so that we can determine that our
or RBNS. assumptions are correct.
We can see the examples in the Property Claims template, but a
specific well explained example, step by step is preferable.
Claims happened to polices issued during 2015 for lines of business covered from the Reinsurance
Commented [EB37]: Example 5 unfortunately in Albanian but
Treaty with sum insured higher than 500,000 Euro will share in the same way as premium. (please Gazmend can translate you.
attached Property Claims template)
Open Balance for every Quota will be:

4 Quarter
Reinsurance Balance - Bundled Surplus Treaty 2013

This balance sheet contains Exchange


100% UY 2013 Rate

1 EUR =
Premium paid/ Commission/ Claims paid/ Reserves LEK

140.2

u/y payment risk XXX XXX

ALL EUR

Property - Material
2013 a.) premium Damage 3,952,496 28,192

Property -
2013 a.) premium Burglary/Robbery 0 0

2013 a.) premium Engineering - CAR/EAR 1,315,595 9,384

Engineering - Machinery
2013 a.) premium Breakdown 242,433 1,729

14,134,15
2013 a.) premium All Risk 7 100,814

2013 a.) premium 0

71
19,644,68
0 140,118.98

38%

Property - Material
2013 b.) commission Damage 1,501,948 10712.90

Property -
2013 b.) commission Burglary/Robbery 0 0.00

2013 b.) commission Engineering - CAR/EAR 499,926 3565.81

Engineering - Machinery
2013 b.) commission Breakdown 92,124 657.09

2013 b.) commission All Risk 5,370,980 38309.41

2013 b.) commission 0.00

7,464,979 53,245.21

Property - Material
2013 c.) claims paid Damage 0 0.00

Property -
2013 c.) claims paid Burglary/Robbery 0 0.00

2013 c.) claims paid Engineering - CAR/EAR 0 0.00

Engineering - Machinery
2013 c.) claims paid Breakdown 0 0.00

2013 c.) claims paid All Risk 109,518 781.15

2013 c.) claims paid 0.00

109,518 781.15

12,070,18
Open balance 4 Quarter 2013 4 86,092.61

Property - Material
2013 d.) outstanding losses Damage 40,907 291.77

Property -
2013 d.) outstanding losses Burglary/Robbery 0 0.00

2013 d.) outstanding losses Engineering - CAR/EAR 0 0.00

72
Engineering - Machinery
2013 d.) outstanding losses Breakdown 0 0.00

2013 d.) outstanding losses All Risk 191,167 1,363.53

2013 d.) outstanding losses 0.00

232,074 1,655.30

Property - Material
2013 d.) IBNRS Damage 0

Property -
2013 d.) IBNRS Burglary/Robbery 0

2013 d.) IBNRS Engineering - CAR/EAR 0

Engineering - Machinery
2013 d.) IBNRS Breakdown 0

2013 d.) IBNRS All Risk 0

2013 d.) IBNRS 0

0.00 0.00

This Open balance will start at the moment that treaty start and will finished when each and
every claim reported under this treaty will be paid. Generally are prepared on quarterly bases
but it might need to be monthly as well.

For the moment there is not applied any profit commission or Sliding scale commission under
this treaty but we should be prepared if it will be on the future. If this will be the case there will
calculate for this treaty as well SSC and Profit commission at the end of the year.

5.4 Quota Share Loss Occurrence (MTPL & PA QS)


These treaties are on accident year bases. The quota might be NET or Gross.

Quota 50% means that for all Insurance policies MTPL (DMTPL, Green Card, Border) this treaty
will have 50% of premium and paid 50% of Claims.

Sliding Scale Commission will be applied on this treaty as well which is related with Loss ratio of

Incurred Losses/Earned Premium

Incurred Losses = Loss pay+ RBNS+ IBNR of the losses occurred during the treaty period.

73
Earned Premium = Written Premium + UPR entry - UPR exit

Written premium: Premiums – tax- any XL reinsurance treaty (for QS NET)

Premiums- tax (for QS Gross)

After that reinsurance commission is calculated. Commented [NO38]: An example calculation for commission
with specific details would be appreciated, including specific values
for the given parameters.
Deposit: one other point of this treaty. During the first year deposit = URP exit+ RBNS+IBNR
Loss pay means Paid Claims?
Deposit Interest rate is payable to the reinsures and it might be variable or fix. Please define UPR exit and entry?

Is the calculation for the ceded premium similar/same as QS


Truncation/ If there is a claim higher than truncation lever let say 2.000.000 Euro for the propose calculation that we presented?
of this treaty this claim will calculated up to truncation level.

CAP/ maximum % of combined ratio commission + loss ratio. If there is higher this treaty will take
in consideration up to maximum CAP.

Balance payable is: Earned Premium - Incurred losses - Reinsurance Commission + Interest
Deposit (more data and explanations on the Master Account). Commented [NO39]: Please give us a specific examples for
these parameters also.

The same will be for PA QS. Commented [EB40]: The best example is master account that I
have already sent you but I cannot explain it by e-mail

5.5 XL Reinsurance Treaties


XL reinsurance treaties are on loss occurrence year bases. So there are covered all losses occurred
during the treaty period. These treaties are based on the claims. The main part of it are/ Commented [NO41]: Please give us a specific XL examples with
details and various cases, especially when 2 layers are touched. By
specific examples we refer to an entire scenario, including one
1. Layers/ It might be different layers under which will be covered the claims policy (or more if necessary for covering various cases), with all
included parameters and constrains /limits.
Eg Commented [EB42]: Attached Reisnurance Presentation but
unfortunately in Albanian
Layer 1. 1.000.000 xs 200,000 euro/ meaning that retention of the company for each and every
claim is 200,000 euro and for higher claim value the reinsurer is responsible.

Layer 2. 3.000.000 xs 1.200.000 Euro/ priority of layer 2 is maximum capacity of layer 1. So in


case the claim is 2.000.000 Euro both layers will be touched.

But maximum responsibility of insurer/reinsured will be 200.000 Euro

On both layers participate different reinsurer with different shares on each and every layer. If
there is a claim participation of the reinsurer will be related with the layer they are in and shares
they have in it.

74
There are some cases e.g green card where there is one layer with unlimited capacity. Commented [NO43]: Please provide specific example for this
case also.

For group programs there might be different layers for different line of business/

Marine & Aviation>

Segment 1. Marine 2.900.000 xs 100.000 Commented [NO44]: Is this the upper limit of Sum Insured
covered by the reinsurers? Is MPL as alternative acquired here in
XL?
Aviation Hull 7.400.000 xs 100.000
Commented [EB45]: Yes this is, PML might be as alternative
but on sales part not on reinsurance. Until know there is calculated
Aviation Liability 9.900.000 xs 100.000 manualy.

In case of good in transit claim the segment one will be touched because these policies are
covered from Marine.

Each and every claim under 100.000 Euro is responsibility of insurer/reinsured.

Each and every claim higher than 100.000 Euro both parties participate on claim
insurer/reinsured up to 100.000 Euro and the reinsurers for other part of claim as per their shares
on it.

Eg

Marine segment/ reinsurer 1> 50%/ reinsurer 2> 40%/ reinsurer 3> 10%

Claim 2.000.000 Euro

Insurer/reinsured retention = priority = 100,000 Euro

Reinsurers claim 2.000.000 – 100,000 Euro= 1.900.000 Euro

Reinsurer 1 50% of 1,900,000 Euro


Commented [NO46]: This is percentage that is applied to what
Reinsurer 2 40% of 1.900.000 Euro parameter? Could you provide an example?
Commented [EB47]: The parameters are got from IMF Indice.
Reinsurer 3 10% of 1.900.000 Euro Please find attached one example.
Commented [NO48]: It would be preferable if you could isolate
Mostly on MTPL claims there is applied indexation clause which is updated of insurer one case/specific scenario like examples and give us detailed
explanation/calculation method with all parameters explained,
participation in the claim in case inflation is more than 10%. This is related with the date of the since we find the template with all the data a bit difficult to isolate
all required data and also some data are not explained in this
claim & place. document.

Please find attached indexation template We need scenario like examples since those are better for us for
understanding and formulating the process and the calculation
steps than the provided excel calculations.
2. General Premium income (GNPI)
Commented [EB49]: Is it not possible to be explain by e-mail
because there is a little bit complicated and related with the loss
occurrence date and place.

75
Expected Premium Income for treaty class of business less taxes which is used to calculate
reinsurance premium.

3. Rate

Rate might be different for different layers. It is decide by reinsurer at the beginning of the treaty
period and will be the same until the end.

GNPI*rate = reinsurer premium for each and every layer. It can be calculated reinsurers premium
as well based on their % on the layer.

4. Minimum & Deposit Premium (MD)

Generally there is applied a % on the reinsurer premium it might be 90% or 85% or 80% to find
out the premium payable. It might be paid on installments.

5. Premium Adjustment

At the end of the year will recalculate reinsurance premium based on the premium income of the
year. If these are less than those planed on the beginning there not need for changes. If are bigger
reinsurance premium will be recalculated based on the GNPI at the end of the year and will be
paid additional premium to the reinsurer.

Eg. GNPI expected 100,000 Euro

Rate 2.5%

Reinsurer premium 2,500 Euro

MD 90%. = 2250 Euro will be paid on the beginning of the year or with installment

Premium adjustment at the end of the year.

1 option GNPI 85,000 Euro

Rate 2.5%

Reinsurer premium 2,125 Euro

Paid during the year 2250 Euro so no need for adjustment

2nd option GNPI 120,000 Euro

Rate 2.5%

76
Reinsurer premium 3000 Euro

Paid during the year 2250 Euro

Premium adjustment 3000-2250= 750 Euro Commented [NO50]: These calculations seem clear enough
but we might have some additional questions later in the
implementation process.
6. Reinstatement The single question for this part is does this apply for marine and
aviation in the same manner (no differences)?
In case of claim there is condition of the reinstatement on it. It might be for free or with Also we can assume that these are calculations for ceded premium,
whereas the calculations for the claims are given under Section XL
additional premium on pro/rata for value for time or both of them. Additional premium might be treaties/Subsection 1 Layers..?

in percentage 100% or 70% depending from the contract. Commented [EB51]: Yes for both questions

The reinstatement will be calculated when the claims will be paid by the reinsurer. If on the
mentions contract were premium adjustment reinstatement is applied on the final premium
payable

E.g. Intersig case

Reports for this treaty might be on treaty year or accounting year

5.6 Combination of XL & QS loss occurring reinsurance treaties


Combination might be on Gross meaning that QS enter in force first and XL after that or Net
Meaning that XL is first and QS after that.

QS Gross.

Quota 50% - QS share 50% & XL share 50%

XL conditions will be shown 100% and at the end will be divided by 2 since there is only 50%
coverage

Claim lower than 50% of XL priority will be part only on QS treaty


Commented [NO52]: We would kindly ask for scenario like
Claim higher than 50% of XL priority will be part of both treaty specific examples (two for both gross and net cases, and maybe
also covering XL priority. A bit more detailed explanation how we
Please find attached claims calculations on both cases. determine the XL priority also would be appreciated.

We need scenario like examples since those are better for us for
At the beginning of the year claims department is informed regarding the claims value for understanding and formulating the process and the calculation
steps than the provided excel calculations.
which they should sent immediately note to reinsurance department. Is it possible to put it as
an alarm in claim Module at the moment they registered the claim or change reserves? You can just take few examples from the excel and guide us in a
scenario like explanation.
Commented [EB53]: Example 6

77
For all these claims the Loss advice should be fulfilled and since that all the data are in claim IT
module it will be easy to provide it for all type of reinsurers.

Please find attached two most imported loss advice forms but in the same way might be
prepared for each and every reinsurance treaty.

Even for maximum limit of indemnity should be one warns on the system in case it is higher
than treaty capacity for the time we are talking about.

5.7 Facultative & Fronting Reinsurance Contract


This are reinsurance which are done case by case whenever is necessary for the company. Each
and every of them is related with one insurance policy. This insurance policy might be reinsured
for some shares which company cannot have it or only one risk of the insurance policy.

Facultative/Fronting reinsurance might be proportional so the reinsurer might have some shares
and reinsured some other or non-proportional so the reinsured decided to get the maximum
possible risk and reinsured the other part on XL bases.

Proportional/ both parties will have shares on the risk and claims

Reinsured will get reinsurance commission as % of the reinsurer premium

Eg

Client maximum limit 5,000,000 Euro

Reinsured capacity 2,000,000 Euro = 40%

To be facultative 3,000,000 Euro = 60%

Premium 100%= 10.000 Euro (less taxes)

Reinsured premium/ 10.000*40%= 4.000 Euro

Ceded Reinsurer premium/ 10.000*60%= 6,000 Euro

Reinsurance commission/ 10% (it might be different depending from the negotiations)
6.000*10%= 600 Euro

Net reinsurance premium/ 6.000-600= 5.400 Euro

Will be the same calculations if will happen a claim. So for each and every claim of this contract
40% will be part of reinsured and 60% part of reinsurer.

78
In case that the mention contact is part of one reinsurance treaty the Reinsured Capacity,
premium & claim will be included on the calculations of the treaty this contract belongs.

FRONTING reinsurance are facultative one coming from international programs generally with
100% ceded of the risk and/or premium. There are some case were the company might get some
small % like 5%. The idea behind is the same as proportional facultative reinsurance with the
difference that reinsurance commission is called fronting fee.

Non Proportional Facultative Reinsurance.

Reinsured get the part of the risk he can afforded and reinsure the reaming part of it same as XL

Eg.

Insurance capacity 5.000.000 Euro

Reinsured maximum possible limit/ 2.000.000 Euro

Reinsurance 3.000.000 XS 2.000.000 Euro

Insurance premium/ 10.000 Euro

Reinsurance rate/ 1 per mille

Ceded reinsurer premium/ 3.000.000*1 per mill = 3.000 Euro

Claims up to 2.000.000 euro will be paid from the reinsured. Higher then will be split 2.000.000
euro by reinsured and the reaming part by the reinsurer

Claim 2.500.000 Euro

Reinsured claim/ 2.000.000 Euro

Reinsurer claim/2.500.000 Eur-2.000.000= 500.000 Euro

It might be applied reinstatement as well on the part of the reinsurer part of the claim like in XL
reinsurance treaties.

In case that the mention contact is part of one reinsurance treaty the Reinsured Capacity,
premium & claim will be included on the calculations of the treaty this contract belongs.

5.8 Requirements from Reinsurance Module

79
Treaty Reports Commented [NO54]: Additional questions about the reports
will be sent to you after we receive the answers/additions to this
document version
1. Open balance for each and every quota and the total of them from the starting treaty.
2. Reports of the Open Balance divided by the reinsurer participating on each reinsurance
treaty.
3. Report of Claim Paid & RBNS for Property Reinsurance treaty for each UW year and for
each separate claim covered from it.
4. Reports of the above mentions claim divided by the reinsurers participating on it.
5. Reports on Combined XL & QS (loss occurrence) reinsurance treaty related with premium
income, Claim part of them, reinsurance commission, deposit, interest on deposit and
divided by reinsurers participate in it.
6. Report of the Net result for each and every treaty from the starting point of it until the day
we will need this report.

Accounting Reports Commented [NO55]: Additional questions about the reports


will be sent to you after we receive the answers/additions to this
document version
These will be reports only for accounting year. So will take in consideration what will happen with
reinsurance treaty during accounting year. Reports might be monthly or quarterly.

1. Reports for Facultative & Fronting Reinsurer divided by reinsurer (please see attached)
2. Reports for each reinsurance treaty during the accounting year related with premiums,
claims, RBNS Re, IBNR Re, UPR Re (entry & exit) reinsurance commission, Deposit,
Interest on Deposit, for each and every reinsurer for the period we are looking for and in
total.
3. Cartel with Premium payment, claims received, commission received for each treaty and
divided by reinsurer during the accounting year with the due date of payment & payment
date.
4. Outstanding balance on a certain date the liabilities & receivables for each and every treaty
& reinsurer for which there is the obligation in force.

All reports should be on reinsurance currency and ALL. Reinsurance currency generally is in Euro
but there are some Fac/Fronting reinsurance in USD

Cash Call

IT opinion how will treat these cases?

80
Other

1. Reinsurance-Sales-Payment Report (Sheet: Collected)


On this report are included policies collected in a given period of time. This kind of report
was only for Interalbanian. If board members of each company decide to calculate
premiums on base “collected”, this report should be added for both companies. Also it
must be updated with two columns that are marked yellow and requirements that are
suggested for the claims module (see pg.)

2. Reinsurance Report (Sheet: Policat ne Fuqi)


On this report are included valid policies in a given period. This report is very important
for the renewal of reinsurance treaties. Also this kind of report was only for Interalbanian
and must be added for two other companies. The updates necessary for this report include
as follows:
One between columns “Mbulimi” or “Rreziqet e siguruar” should be removed because they
present the same information.
Add fields “PML” for property and “Shuma e sigurimit per ngjarje” for liability contract.
Add fields for “sum insured”. This amount should be divided separately for buildings,
machines and equipment, household items and business interruption.

3. A new report showing GWP, Ceded Premiums and Reinsurance Commission per each Line
of Business would be useful from the system. See the above example.

81
ALL Total
Mln 2013 2014 Deviation

GWP 1,354.5 1,858.6 37%

Ceded Premium Written (753.7) (901.2) 20%


RI share in change in UPR (95.5) 84.8 -189%
RI share in change in DAC - - #DIV/0!
Earned ceded premium (849.3) (816.4) -4%

Claims paid RI Share 172.5 179.6 4%


change in claims Reserves RI share 282.5 289.7 3%
Claims incurred RI share 455.1 469.4 3%

RI Commissions 181.7 376.9 107%


RI balance (212.5) 29.8 -114%

82
6 Integrated Applications

The system must provide the adequate data in order to extract integrated reports needed from
the management point of view.

Company
selection criteria
Client Segment
Total MTPL Casco Fire & Other Property
Client
Sales Channel
Sales Intermediary
1-12_2014 1-12_2013 change 1-12_2014 1-12_2013 change 1-12_2014 1-12_2013 change 1-12_2014 1-12_2013 change

Gross Written Premium


change in UPR
Gross Premium Earned 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
GR Claims paid 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
current AY
previous AY
change in GR RBNS 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
current AY
previous AY
GR Claims incurred 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
GR Commissions
GR Contribution Margin 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

GR Claims paid / GPE #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Change in GR Claims Reserves / GPE #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
GR Loss Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

GR Commissions / GWP #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
GR Commission Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

GR Combined Ratio #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

non accounting data


no. of policies
no. of risks covered
no. of claims
no. of subclaims

average GWP
average claim
claims frequency

Integrated application is a type of report that is needed based on the selection criteria. The report
should be provided on a company level, client segment level, client level, sales channel level and
Sales Intermediary level per line of business regarding two different periods.

The components that are needed to be calculated and generated from the system involve data
from all departments, which emphasizes the need of a central database.

Gross Premium earned is the sum of gross written premium and the change in unearned premium
reserve.

83
Gross claims incurred is the sum of gross claims paid and the change in gross reserve for the
current accident year and the previous accident year.

Gross contribution margin is the sum of gross premium earned, gross claims incurred and gross
commissions. It measures the effect of gross premium earned in the result of the period without
reinsurance part.

In this report the program should also calculate and provide several ratios as below:

GR Claims paid / GPE: the ratio of total losses paid in claims expenses divided by the total
premiums earned.

Change in GR Claims Reserves / GPE: the ratio of changes in gross claims reserves divided by the
total premiums earned.

GR Loss Ratio: the ratio of total losses incurred (paid and reserved) in claims plus adjustment
expenses divided by the total premiums earned. Is the sum of Gr Claims paid/GPE and Change in
Gr Claims Reserves / GPE.

GR Commissions / GWP: gross commission expenses divided by gross written premium.

GR Commission Ratio: gross commission expenses as a percentage of gross premium earned (GR
Commissions / GPE).

GR Combined Ratio: the sum of gross loss ratio and gross commission ratio.

The program should also provide non accounting data as follows:

Number of policies: Number of issued contracts in a given period.

84
Number of risks covered: Number of risks covered by an insurance policy.

Number of claims: Number of reported claims

Number of sub claims: Number of material and non-material claims related to one claim case.

Average GWP: gross written premiums divided by the number of exposure units valid in the
period.

Average claim: Average claims in total.

Claims frequency: the sum of the number of reported claims in current period and the number
of expected IBNR claims in current period divided by the number of exposure units.

7 IT Management

9.1 To avoid the lock of main sales tables in DB during business hours when users are
generating long running reports we thought to utilize a second DB which will be
synchronized periodically with the main DB.
The application should execute SQL Query of reports when the period filtered by the user
extends beyond the actual date on the copy DB.
Only reports that are filtered for the current date will be executed on the main DB.

9.2 It happens occasionally that a policy is saved on the system but not printed and adding
a reprint button would resolve these cases.

85
86
8 Annex

Example for calculation of exposure unit and claims frequency in Green Card policy

1 policy inception/renewal 01/06/2014


2 risks covered
material damage
bodily injury

Financial Reporting Date 01/01/2014 30/06/2014

exposure units 30 90 1 0.3333


days active risks

claims frequency 0.0000


0.00%
0.3333

GWP ALL 10,200 41366.7

GPE 1-6_2014 ALL 3,400

3,400
10,200
avg. GPE ALL 0.3333

87
Example for calculation of exposure unit and claims frequency in DMTPL policy

DMTPL KPIs

1 policy inception/renewal 01.10.2013


2 risks covered
material damage
bodily injury

1 claim event accident date 15.03.2014


material damage

Financial Reporting Date 1/1/2014 6/30/2014

exposure units 181 365 1 0.4959


days active risks

no. of subclaims 1 1.0000


risks

claims frequency 1.0000


201.66%
0.4959

GWP ALL 12,000

GPE 1-6_2014 ALL 5,951

5,951
12,000
avg. GPE ALL 0.4959

Claim ALL 140,000

140,000
140,000
avg. claim ALL 1.0000

88
Status Report (Claims Committee Meeting)

I. New reported claims


Claim ID date of registration reporting date accident date insured type of damage cause of claim LoB claim status payments RBNS

purpose: information + decision

II. Open claims (not yet approved by Claims Committee)


Claim ID date of registration reporting date accident date insured type of damage cause of claim LoB claim status payments RBNS

purpose: decision

III. Open claims (already approved by Claims Committee)


Claim ID date of registration reporting date accident date insured type of damage cause of claim LoB claim status payments RBNS

purpose: follow up + reevaluation

thereof Court Cases

IV. Settled/closed claims


Claim ID date of registration reporting date accident date insured type of damage cause of claim LoB claim status payments RBNS

purpose: follow up

89
Reinsurance Reports

Example 1
Property QS 50%
Maxium capacity: 500,000 Euro

Line of business: Fire

Provisional commision: 55%

SSC (Sliding Scale Commision)


SSC loss ratio 70% 20%
SSC commision rate 15% 65%

1quota 2quota 3quota 4quota Total


Cede premium 100,000 200,000 150,000 120,000 570,000
Provisional Commision 55,000 110,000 82,500 66,000 313,500
Reinsurance losses 30000 40000 70000 0 140,000

Loos ratio 25%

This means that finnal commision for this protofio will be 60% because loos ratio is within sliding scale commision and in this case increase of loss ratio is related with decrease of SSC.
There is diferent whane loss ratio is out SSC in case loss ratio is 80% maximum commision for this portfolio will be 15% and other way around if loss ratio is 15% maximum commision
will be 65%

Please find on the nex sheet the calculations in Excel for one of the year. These are the real calculations because take in consideration Reserves as well
(RBNS, IBNR) which we get from the Actuary).

Example 2 SSC and PC 2012

90
Accounting Year
ADJUSTMENT SLIDING SCALE COMMISSION UWY 2012
as at 31.12.2013

Currency EUR EUR EUR

Sliding scale commission Property QS Liability QS Total QS


UWY 2012 2012 2012
A Premium (written) 10,472.68 1,193.90 11,666.58 ok
B Unearned premium as at 01.01.2013 115,213.93 3,068.35 118,282.28 ok
C Unearned premium as at 31.12.2013 143.17 176.79 319.96 ok
D Paid Losses 3,160.00 0.00 3,160.00 ok
E O/L as at 01.01.2013 1,705.00 2,166.00 3,871.00 ok
F IBNR as at 01.01.2013 0.00 0.00 0.00 ok
G O/L as at 31.12.2013 1,605.16 2,156.92 3,762.08 ok
H IBNR as at 31.12.2013 0.00 0.00 0.00 ok
Loss Ratio = ((D+(G+H)-(E+F))/(A+B-C) 2.44% -0.22% 2.35% ok
%Preliminary commission(provisional) 60.0% 60.0% 60.0% ok
Preliminary Commission 75,326.06 2,451.28 77,777.34 62.35%
Adjustment of Comm. In % According to Loss Ratio 59.92% 62.58% 60.00%
Sliding scale Commission 2012 75,220.82 2,556.52 77,777.34
Commission adjustment -105.24 105.24 0.00
Total commission 2012 75,220.82 2,556.52 77,777.34

Property sliding scale:

Max_comm 60% 60% 60% ok


Min_comm 25% 25% 25% ok
Max_LR 60% 60% 60% ok
Min_LR 25% 25% 25% ok

Example 3

91
Property QS 50%
Maxium capacity: 500,000 Euro

Line of business: Fire

Provisional commision: 55%

SSC (Sliding Scale Commision)


SSC loss ratio 70% 20%
SSC commision rate 15% 65%

Happened one claim from fire

Total claim reserve (RBNS) 400,000

Reinsurance part of reserve (RBNS RE) 200,000

After one week there is a part of the claim let say 200,000 Euro

100% of the claim Reinsurance part


Paid calim 200,000 100,000
RBNS 200,000 100,000
Total 400,000 200,000

After some time result the claim reserve is not correct it should be 500,000 Euro so total claim

100% of the claim Reinsurance part


Paid calim 200,000 100,000
RBNS 300,000 150,000
Total 500,000 250,000

In case sum insured is higher than 500,000 Euro for the calculations of this part will take
in consideration only 500,000 Euro because this is the maximum capacity of the treaty.

Example 4
BOND QS 75% Quota

Maximum Capacity 1,000,000 Euro

Capacity from 1,000,000 Euro-2,000,000 Euro on variable quota with net retention not more then 250,000 Euro

1st case Direct SI 500,000 Euro


Primi 5,000 Euro

Reinsurance SI 375,000 (500,000 *75%)


Primi 3,750 (5,000*75%)

Claims on the same way

2nd case Direct SI 1,500,000 Euro


Primi 7,000 Euro

Reinsurance SI 1,250,000 Euro 83% quota


Primi 5,810

So the retention of the company should not be higher then 250,000 Euro in case SI is beetwen 1,000,000 Euro- 2,000,000 Euro.

92
Example 5
Risigurimi Proporcional Surplus

Linja; 200,000 Eur


Mbatja; 1 linje
Risiguruar : 9 Linja
Kapaciteti maximal I mbulimit: 2,000,000 Eur

Ndarja e Rrezikut midis siguruesit dhe risiguriesit

Rreziku Primi
Vlera e rrezikut Mbatja e kompanise Risiguruar Primi I polices Primi I kompanise Primi ne risigurim
Rasti 1: 100,000 100,000 - 200 200
Rasti 2: 200,000 200,000 - 400 400
Rasti 3 300,000 200,000 100,000 600 400 200
Rasti 4 1,500,000 200,000 1,300,000 3,000 400 2,600

Rreziku Demi
Ndarja e demeve Vlera e rrezikut Mbatja e kompanise Risiguruar Demi 100% Demi I kompanise Demi I risiguruesit
Rasti 1: 100,000 100,000 - 70,000 70,000 -
Rasti 2: 200,000 200,000 - 200,000 200,000
Rasti 3 300,000 200,000 100,000 150,000 100,000 50,000
Rasti 4 1,500,000 200,000 1,300,000 1,200,000 160,000 1,040,000

Example 6

93
Loss occurance

Quota share 50% Quota

XL for 100%

1st layer 800,000 xs 200,000 priotity/retention


2nd layer 2,000,000 xs 1,000,000
3rd layer 2,000,000 xs 3,000,000

QS Net

Claims happened 500,000 Euro

First will be in acction XL treaty meaning that 200,000 Euro will be retein by the company (priority)and 300,000 will be on reinsurance XL

Priority 200,000 Euro will be split by QS meaning that 50% of it =100,000 Euro will be on QS reisnurance and 100,000 of it will be the loss of the company

QS Gross

Claims happened 500,000 Euro

First will be in acction QS treaty so this claim will be split 50% on QS=250,000 Euro and 50% on XL meaning 250,000 Euro

XL is only for 50% share so in this case the priotiy will be 100,000 Euro

XL part of 250,000 Euro the claim will be divided

100,000 Euro paid by the comapany and

150,000 Euro by the reisnurer.

94
9 ANEX 2.1
General Identification of Entities Structure Reference
General Object Description (Referenced Objects)
Object Code (for references)
Three Letter Code + Three Numbers for Reference

This code will be used to reference the object within the total project blueprint and MBA implementation

Object Description
Description of the object logic, what it represents and other descriptions if needed.

Operating Objects Types and/or Categories


Structure of the logical object with categories, types and other dependencies. For Example the Types of
Companies in Albania.

Object Properties
Properties with description of the object, if properties are depending on type-s relation between them. For
example for the object Person we would like to have Name, Surname, Fathers name, Birthdate, NID (Uncial
State Identification Number for Persons) etc.

User Inputs
Which of the object properties are user inputs by defining the input type and which of them are calculated
and/or retrieved from elsewhere. For example for the Profession field in the Person object we should select
from a dropdown where defined professions are or Name of the person should be text max 50 Characters
etc

Object Operations
Generally the Operations on Simple Objects are CRUD (Create, Insert, Update, Delete and Select) but if
there are other operations please define on this section

Roles and Rights


Which of the system user types have access and what access they have on the entity

Object Change-Management
Log of the object change and control or audit procedures if there are needed

95
Policies Perspective Objects
Policy Code (for Reference)
Three Letter Code + Three Numbers for Reference

This code will be used to reference the object within the total project blueprint and MBA implementation.
For Example TPL001 (maybe in the future we might need different types of Casco)

Insurance Product Object Data


All the entities that are inserted into the policy and/or are needed to compile the policy

Table of Dependencies on Objects


All the entities that the completion of the policy depend on. For example in the TPL policy is needed the
Car, the Proprietary, other Insured Persons etc.

User Interface
Print screens of current application or sketch in case they are not available.

User Inputs
In the User Interface which are the input types, how he searches for entities etc.

Calculations and/or dependency between properties


For example how the premium is automatically calculated from the Car data in the TPL policy

Product Operations
All operations for the specified policy. For example Issuing, Duplicating and canceling etc. Be careful for
massive policy issuing like in tenders for TPL and/or Health Insurance for Companies Personnel.

Roles and Rights


Definition of Rights over Operations for each Role in the system. For example Agent has the right only to
issue and duplicate a TPL. Sales personnel has the right to cancel a policy etc.

Object Change-Management

What should be controlled through report and reference to the report on the report section

External Communications
During any process there might be needed to communicate with external system, like the communication
with BKT and AMF during the issuing process of TPL. This session should be filled in by IT

96
Screenshots of Actual Application
Simple screen shots from the current application and/or sketch drafts if they are missing in the current
application

Linked Work Flow


Work flows for every operation described in the product operations

Import / Exports / Automatic Generations


Export formats of the data if needed to analyses outside of the MBA system. Imports in case of imports
from third parties systems linked with the web services session. Or Automatic generation of policies from
lists in excel (for example in case of Health Insurance for Companies Personnel)

Printing Formats
Printing Formats of the policy images

Additional Requests
Additional requests that are not in the sections above.

Procedures
Procedure Code (For reference)
Three Letter Code for Object Related + Three Letter for Procedure + Three Numbers for Reference

This code will be used to reference the procedure within the total project blueprint and MBA implementation.
For Example TPLISU001 (maybe in the future we might need different types issuing processes for Casco)

Procedure Description
Description of procedure in writing, with steps.

Procedure Input Objects


What is required by the procedure as input, all object entities!

Procedure Output Objects


What is produced by the procedure, results of the procedure and where they are stored and/or printed!

Procedure Calculations
What automatic calculations are involved in the procedure, which entities are involved and where is the
result stored!

Procedure Workflow
Workflow of procedure schematics

97
Procedure Permitting Requests
For example during the duplicate issuing of TPL, firstly the agent should have access on the Policy to be
duplicated. Or for example in case of changing the Premium of a policy IT must have the confirmation from
Sales Director.

User Interface
Print screens of current application or sketch in case they are not available.

Automatic Execution
In case within the procedure has automatic calculations and/or executions please fill in within this session.

Roles / Rights
Definition of Rights over Operations for each Role in the system.

Reverse Procedure
In case the procedure has a reverse procedure please specify code of the reverse procedure in this session.

Log Analysis and Audit


Which is the log saved for the procedure, and how this logs are audited. This section is to be filled by
Software Providers after the draft is compiled by the companies.

Risk Identification and Handling


Identification of Risks within the procedure, and delegation of this risk to treatment procedures.

 For Identification of Communication Risks and/or software risks during procedures will be
responsible the software providers.
 For Identification of Procedure Risks should be responsible the companies.
 Treatment of Risk Procedures should be established by IT and Companies in collaboration.

Reports
Report Code (for reference)
Three Letter Code + Three Numbers for Reference

This code will be used to reference the procedure within the total project blueprint and MBA implementation.
For Example BDC001 for Bad Clients Report version1

Report Description
Description of what reports serves for in written

Report Structure

98
Format of the report with specifications for each field report + Screenshot from actual system and/or sketch
in case the report is missing

Objects Involved
Table with codes of entities (objects) involved in the report with the specific properties.

Calculations within the report


For example total is the sum of the column etc.

Reports Parameters
Which are the parameters needed for the generation of the report and their specific properties. For example
DateFrom and DateTo are date selections.

User Rights
Definition of Rights over Reports for each Role in the system.

Third Party Communication


 This sessions are to be filled by IT

Procedures involved
Table of codes of procedures depending on this communication

Communication Structure
Technical specifications of this communications.

Workflow
Reference to workflows in which this communication is part of.

RISK Identification and Treatment


Identification of Risks that come as result of communication interruption or intersection.

99
100