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Folksamerica Delivers a Single View of the Business

  • September 01 2007, 1:00am EDT

REVIEWER: Philip Marzullo, CIO, Folksamerica.

BACKGROUND: Folksamerica Reinsurance Company is a multiline broker market reinsurer and a subsidiary of White Mountains Re Group. The company services the U.S., Latin American, Caribbean and Canadian markets by writing property, casualty treaty, and accident and health treaty business.

PLATFORMS: Microsoft SQL Server databases.

PROBLEM SOLVED: One of our primary objectives was to improve the granularity of the loss reserving process. Until recently, our planning, pricing and management activities were derived from disconnected Excel spreadsheets accessing unrelated data sources. We decided to pull all this information into a single data source and create a more controlled environment to simplify Sarbanes-Oxley compliance. In recent years, Folksamerica has implemented a document imaging system, introduced workflow management procedures to streamline underwriting and claims, developed a marginal impact analysis tool to assist with underwriting and deployed a new contact management system for salespeople operating in the field. Many  new systems have uncovered a need for business intelligence (BI). Folksamerica has constructed a data warehouse and BI environment based on the Insurance Reporting Foundation (IRF) from Information Builders.

PRODUCT FUNCTIONALITY: The IRF includes a complete data model and parameterized reporting framework that functions right out of the box, enabling executives, analysts, operational staff, customers and agents to quickly answer business questions about policies, premiums, claims, underwriting, triangulation and key performance indicators (KPIs). Users can obtain this information via a Web browser, as part of an Excel spreadsheet or in a PDF file. In each case, they can drill down to the underlying data as desired, without the need to install client software.

STRENGTHS: The data warehouse has changed the way we run the business. It allows our actuaries to access data when they need it and to monitor KPIs. In addition, many standard reports included with the IRF have provided a great starting point for creating custom reports.

WEAKNESSES: Starting with a packaged data model necessarily constrains flexibility. In our case, the trade-offs were worth it. While data warehouses typically take 12 to 18 months to complete, we did it in five months.

SELECTION CRITERIA: Folksamerica asked several BI vendors to bid on the project. We gave each vendor some of our data and asked them to produce certain results. Only Information Builders delivered. Within eight days, they came back to us with several reports, including sophisticated triangulation reports that our actuaries use during the reserving process.

DELIVERABLES: Folksamerica retained Information Builders Consulting to conduct a complete business process analysis of the reserving area, which included developing specifications for the data warehouse and for a new loss reserving system. We also retained Information Builders Consulting to build a front end for the Milliman Reserve Pro package, which interfaces with the data warehouse to create a complete end-to-end loss reserving system. Formerly, creating the necessary reserving cells was a two-week process performed with Excel spreadsheets. Today, the data warehouse and BI platform, along with the Milliman package, enable our actuaries to automate many of the necessary data management processes. About a dozen pricing actuaries and a dozen reserving actuaries use the system. Folksamerica is using the Information Builders tools and associated BI platform to create additional reports, dashboards and KPIs to help managers run other parts of the business. Many types of employees are learning to drill down into the data warehouse to gather the information they need to make better decisions.

VENDOR SUPPORT: We were impressed with Information Builders' business process analysis and project management skills. Both were evident during the proof of concept and came to fruition during the development cycle. Information Builders created the necessary procedures to extract data from the data warehouse, condense several thousand treaties into about 100 reserving cells, create all the associated transactions and put the data back in the warehouse - along with predictive loss numbers for each reserving cell. We instituted rigorous procedures and lockdowns to ensure tight control of the data, simplifying Sarbanes-Oxley reporting.

DOCUMENTATION: The documentation for the IRF product is very complete and easy to understand. The manual would be very helpful for new users to use the system.

Insurance Reporting Foundation (IRF)
Information Builders Inc.
Two Penn Plaza
New York, NY 10121-2898
(212) 736-4433

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