Time for change
Building upon a technology base which can currently be seen within the London Market, Netsett—a strategic partnership between Deutsche Bank and Xchanging—can substantially increase both efficiency and accuracy for insurers.
Providing global accounting and net settlement through the use of structured data, Netsett facilitates the transfer of claims and premium data both within global insurance groups and between global cedants, brokers and carriers.
“We’ve taken part of what we do in London and re-platformed it to make it work globally,” says Max Pell, managing director of Xchanging’s UK Insurance Business.
“It’s been a long journey but we saw increasing opportunity to take this to the global market, we also saw that there were global groups, such as Ruschlikon, which is the collection of the world’s largest reinsurers, as a helpful community to help us understand and build value for this market.”
Duffy adds: “Netsett is a global utility that offers two things to the insurance industry. By offering the back end to e-accounting, users can obtain both an accounting and net settlement resource in one place.”
While e-accounting, which enables an insurer’s financial accounting function and broker to reconcile, is already in place for many insurers, they still have to go through a manual settlement process, which doesn’t offer netting of different transactions between market participants.
“Netsett plugs into the existing accounting process and provides the netting and settlement pieces in an automated function,” says Duffy.
Pell adds: “The reduction in working capital requirement is about 80 percent, and we have proven this in the London Market over the last 15 years. As we move from a period of low interest rates to high interest rates the value of that netting becomes ever greater, because there’s either an alternative use of that cash, or the company is funding that cash by having an arrangement with the bank.”
A completely unique offering, Netsett is state of the art and doesn’t currently exist within the industry, as Pell explains.
“By using Pega technology, the system can easily be updated; it’s modern and very easy to configure which allows change to be made. The technology isn’t complex either. Netsett acts as a glue using ACORD standards, allowing lots of different people using different systems to find a common language,” he says.
Remaining relevant
The partnership of both Deutsche Bank and Xchanging has played an important role in the development of Netsett.
“Working with a technology company such as Xchanging that sits at the heart of the London insurance market and is fully integrated with the market’s plan for modernisation; and on the other side, Deutsche Bank, which is one of the leading transaction banks in the world and the leading cash management house in Western Europe¹, has allowed us to develop this innovative solution,” says Duffy.
Bringing integrity and accuracy to the claims process, the platform operates on a global basis, and via multiple currencies, making it an ideal solution for global corporates.
“Netsett can benefit re/insurers all over the world as it’s not designed for any one country or any one region,” says Duffy.
Challenges
Implementation of Netsett can take as little as two to three months, but as every company has different internal challenges and systems, times can vary between clients.
“While we will be working to a two to three month implementation process, we first have to work with the insurer to figure out the depth of the IT consideration,” says Duffy.
Pell agrees. “Making sure that the client has a project team lined up and mobilised to take on the onboarding is the biggest challenge. We either need an ACORD file or a standard data file, which requires the client to do some IT work to produce the file that will be used by the systems.
¹ Euromoney Cash Management Survey, 2013
