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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