Risk Manger Presentation

8/3/2019 Risk Manger Presentation

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RISK MANAGER


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What is Risk Manager?

The Risk Manager (RM) is an optional FS-RI component thatenhances the Basic System to include functions for

managing single risks (policies)

accumulations

processing the corresponding accounts


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The Risk Manager can only be used in conjunction with theFS-RI Basic System

If you use the Risk Manager to map participation in apolicy, you assign the participation to one or moreassumed reinsurance treaties in the Basic System. Youassign ceded participations to ceded master treaties in

the Basic System. The Risk Manager cannot transfer postings directly to

a system for accounts receivable/payable. Postings arealways transferred indirectly via the Basic System.

To structure the Risk Manager portfolio in order tocreate cession groups, you need to use a dummy treatyfrom the Basic System (portfolio treaty)


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Features of Risk Manager

Mapping Facultative Reinsurance Business

The Risk Manger is used to map the entire insuranceand reinsurance structure for an original policy

Original business

Participations by other business partners who come

between your company and the original policy in thereinsurance chain

Assumed participation of your own company

Participation Ceded to the reinsures andRetrocessionare

Accumulation Management


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RISK MANAGER Structure

CessionGroup

Creation

LiabilityAggregation

Cession Calculation

Claims

Accounting

Risk Manager

Basic

System

Policy

SectionCession

Group

Participation

(Ceded)

Reinsurance

Program

Section

Group

Participation

(Direct)

Primary

System

RI Treaty

Pseudo Cession

Treaty

Portfolio

Treaty


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What is Policy?

The policy maps the business between the policyholder and theprimary insurer

The data in the original policy is the basis for your own business,regardless of whether you are the primary insurer, the reinsurer, or aretrocessionaire at any point in the reinsurance chain

Policy holds the data regarding the Participating partnersand information about the policy type and validity period as

original policy data.

We map our business as a participation in one or more policy

sections of the policy

The policy data that is relevant for the liability is stored in thepolicy sections or under the values insured


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What is Policy Section Group?

Creates a direct link between a participation and apolicy section

There must always be a group between twoparticipations, or between a participation and a policysection

Cession group in a participation chain is always apolicy section group.


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What is Participation?

The portion of the risk is retained by the primary insurer ,the portion you assume, the part you cede to a

retrocessionaire

In Assumed Business

The Policy Section Overviewtab page shows the policy

sections covered by the participation and the precedinggroup to which the participation is linked

In Ceded Business

The Participation Groupingtab page shows the shares

of the risk ceded to other participations (via cessiongroups)

The total liability covered by a participation is calculatedon the basis of the direct or indirect share in the original

policy section covered by the participation


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Cession Group :

Cession groups are used to group participations, whichcan then be reinsured jointly

Cession group created for an original policy section

When Ever we create Cession Group system

automatically creates Ceded Participation


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Cession Calculation

The Cession Calculation assigns coverage to the

assumed participations based on the reinsuranceprogram. The system generates the ceded participations

automatically for the calculated liability

The cession calculation run is applied to the remainingliability after any prior cessions have been deducted


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Prior Cession Group

Cession group are used to assign part of the assumedrisk to any ceded facultative reinsurance treaty manuallybefore the remainder of the risk is assigned to matchingceded treaties by the cession group creation and cessioncalculation functions

This allows you to cover greater risks than youanticipated

several participations belonging to an original policy oraccumulation group are assigned to a prior cessiongroupbut all participations shoul belong to the samepolicy


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Prior cessions are assigned to prior cession groups

A prior cession group is a special form of cessiongroup where "Prior Cession Group" indicator is active forthe group category

Prior cession groups can be assigned manually to thetreaties

Prior Cession group cannot be used in the

Reinsurance Program or cession calculation function


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Cession to Quota Share Treaty

ClassText Maximum

Liability

Indicator

Quota Share % MaximumLiability

A Class A 2 100 10,000,000

B Class B 2 20 10,000,000


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Cession to Surplus Treaty

ClassText Maximum

Liability

Indicator

Retained Line No. of Lines

A Class A 2 1,000,000 7

B Class B 2 500,000 8


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Portfolio Treaty

Portfolio (PTF) treaties are used to assign single risksfrom the Risk Manager to the correct reinsuranceprogram (RIP).

A PTF treaty is not a real treaty. It does not map anagreement between two business partners and youcannot create accounts for it.

Each portfolio treaty section is assigned to a single

reinsurance program


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To use a treaty as a PTF treaty, you must set it up asfollows:

Treaty type must PTF Treaty The Use in Risk Managerindicator must be set at treaty

header level.

The term of the period in the PTF treaty must be within

or the same as the periods defined for the treaties in thereinsurance program

The PTF treaty must have one treaty section for eachreinsurance program you want to assign via this PTFtreaty

The PTF treaty must have a status that allows posting

and is not a reversal status


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Reinsurance ProgramThis enables you to determine the order in which thetreaties are applied to cover a risk

Certain parameters that apply across the entire RIP, such

as the Partner, Valid Fromdate, and Class Model

Ranks are used to define the hierarchy of the treaties


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Assigning Treaties to RIP

The treaty you assign to a reinsurance program (RIP) must fulfillthe following prerequisites:

The status of the treaty allows posting and is not a reversalstatus.

The treaty has the same cedent as the RIP.

The treaty has the same term as the RIP.


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Rank ReferenceRank

Rank

CategoryText Treaty Text

1 1 Treaty CED_TTY_QU

2 1 1 Treaty CED_TTY_S

U

3 2 3 ProportionalFacultativ

e

Requirem

ent


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Pseudo Treaty:

Pseudo treaty that is used in the Risk Manager toassign assumed participations to the treaty sections ofceded treaties

Pseudo Treaty not a real reinsurance treaty

It collects gross accounting information


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Ceded FAC Master Treaty These are the treaties to which you distribute the Risk

Manager exposures via the reinsurance program (RIP)

Ceded Master Treaty is not a real Reinsurance Treaty

The Ceded Master treaty is used to link cededParticipations to the Basic system

Allows accounting information to flow from RM to FS-CD

The own company is the cedent of the treaty


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Accumulation Groups

Policies and policy sections of the same type are group

togetherretrocede them together

You can combine policies from different company codes in

one accumulation group. In order to avoid problems later on,you must define each company code you use as a centralcompany code

Policies can be assigned to existing Accumulation Groupsor to new Groups


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Accounts in Reinsurance

Accounts are Created in same manner as we createaccounts in Basic System

In Risk Manger we create account for Participation

If Account contains a Participation then that account istransferred to Basic system

The accounts created in Basic System are assigned thestatus Pendingcan be processed further in Basic System


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Transfer to the Basic System

The purpose of the transferring postings created for aparticipation in the Risk Manager is to generate corresponding

postings for the treaty sections and treaty periods of theassigned master treaty

Requirement For Transferring the Account

An involvement must be specified in the source account.

The account must be consistent. The system checks forconsistency before the transfer, and also runs validation checksfrom the Basic System.

The Account Transfer from RMindicator must be set for therelevant treaty. This indicator is on the Header Datatab page in

the Control Datasection. Posting must be allowed for the affected treaty periods and

RM objects.

The system must find suitable treaty periods and treatysections in the treaty designated for posting


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The data from the transferred account, including the

postings, is written to the table /MSG/HWKLISTEC

During the transfer to the Basic System the systemassigns the postings from the transferred accounts to thesections of the assigned treaty. It then creates anaccount for each treaty section affected

The Risk Manager accounts are assigned the status

"To Transfer to Re/Retro" or "Transferred" (final status).This depends on whether a transfer to the retrocession

side is possible.


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Transfer to Retrocession

The inward account is transferred to the retrocessionside and distributed to the ceded participations. To dothis, choose the Transfer to Re/Retrocessionbutton

The system creates accounts for the cededparticipations that are assigned to the assumedparticipations via the cession groups

These ceding accounts are assigned the status"Pending" and can be processed further in Risk Manager


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Screens to Create Policy


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Transaction for Processing Policies andCreating Participation is /MSG/H_RISK1

Or By menu path

SAP Easy Access-> User Menu-> FS-RI:Reinsurance-> Risk Manager-> ContractManager-> ManagePolicy/Participation/Group


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Screens to Create Accounts in RM


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Thank You

Documents

Risk Manger Presentation