For centuries, people have searched the world for treasure. Men and women for expeditions, found mining companies, and dedicate their life's work toward their treasure hunt. Time, effort and intention are placed in the direction of this noble quest. This aspiration and effort put forth in search of "finding the payload" is dramatically different than the effort you might put forth in scrounging for change in the couch cushion or recovering funds in the 401(k) you had in your first job 23 years ago. These things just don't seem to matter all that much. But if you were told that there was a chest full of gold buried in your backyard, I doubt your prized green lawn would stand a chance against your ambition to uncover that treasure. And yet many insurance companies unknowingly leave large sums of money buried in the labyrinth of reinsurance.
If I were to tell you that you had a one in four chance of finding buried treasure if you dug up your backyard would you do it? This is the actual reality for many insurance companies in runoff. Yet most of them will never lift a shovel. According to Ed Holland, industry-renowned insurance consultant with over 30 years of experience in such matters, one out of every four Insurance companies he completed an outside audit for had significant reinsured funds available to them.
How could potentially millions of dollars go unaccounted for in an insurance company? It all comes down to whose job it is to uncover it. A claims adjuster has an explicit responsibility to pay on a claim in a timely manner. He is not necessarily responsible to notify and bill the reinsurance company with the associated potential claim. The reinsured money can be hard to remember, hard to administrate, and potentially hard to recover if enough time has lapsed.
This brings us to two critical questions: (1) How do you find out if your yard has treasure buried in it? (2) How do you avoid burying the treasure in the first place?
The best way to find out if you have missed out on reinsurance dollars is to have an expert pour over your reinsurance contracts. This deep dive into the reinsurance contracts can help find holes in your processes, that may be allowing dollars to go missing. p1 builds an automated process based on your contracts during the system implementation. In fact, many p1 clients not only save money in the long term by utilizing the p1 service line, they actually make money very quickly in the near-term merely by implementing. p1's business logic not only finds money that has been missed but also ensures that the company continues to bring in as many reinsurance dollars as possible going forward in perpetuity.