Pierre Laurin

Reinsurance Buying Process

Very centralized approach Subject to overall goals and direction Very formalized process

Get our authorities from Group Reinsurance Committee, then from ZNA’s Reinsurance Charter, then to ZNA’s Reinsurance Sub-committee

Security Committee Business Units do not have the authority to purchase

reinsurance treaties Very strict approved list of reinsurers

Structure of team

Two major teams: Marketing team

responsible to market management, internal and external

Underwriting teamresponsible for reviewing, underwriting, and approving purchase of treaties

Marketing team

Client relationship – Internal Clients General discussions on needs and objectives

of the BUs Data gathering Creation of submission, narrative Market the transaction and placement of treaty

External Client Market management Broker selection, when needed Contact with reinsurers

Underwriting Team

Responsible to underwrite and approve treaties Help design treaty structure, with regards to goals and

objectives Help Marketing team to put best presentation forward Review submission from a reinsurer’s perspective Underwrite program Participate in claims and underwriting audits Benchmark pricing from the actuarial team Set retention, inclusive of co-participation Help marketing in setting firm order terms and

conditions Design contract according to standard clauses

Placement philosophy

Prefer Excess of Loss Typically, high retentions with co-participation in

upper layers Co-participation is preferred to eliminating layers

altogether Keep markets involved Allows for market pricing More flexibility in placement

Prefer large treaties with economy of scale with panel of reinsurers

Reinsurers prefer smaller treaties with targeted portfolios, small number of reinsurers preferred

Need to reconcile the two opposite needs.

Placement Philosophy

Contracts Signed within 90 days Initial contract with submission Final contract with firm order terms

Two sections of contracts Business terms Standard clauses

Placement Process

Total 9 month process 180 days -> review of goals and objectives 150 to 120 days -> data collection, loss experience and

BU underwriting reviews 90 days -> account manager review of data, narratives,

start of building of submission, contact with markets on goals and objectives, initial wording

60 days -> reinsurance underwriting reviews, data analysis and pricing benchmarking, discussions with markets

45 days -> submission out to market

Placement Process

Total 9 month process (cont’d) 30 days -> Negotiations with markets, finalization of

benchmarking, contract wording, final review of markets against approved list

15 days -> firm order terms with final contracts, receive authorization, sign lines

0 -> transaction completed +7 days -> internal notification, accounting systems

feed + 15 days -> issuance of I&Ls, premium allocation

between units +30 to 90 days -> contracts signed, close final issues,

take remedial action on non-performing reinsurers

Summary

Very formalized process Very technical with involvement of

underwriters, actuaries, marketing, BUs management

Successful in achieving our goals Process never stops