Quota Share Management: Automating Commissions and Experience Adjustments
Quota share treaties involve ongoing commission and loss ratio monitoring. Automation calculates experience adjustments accurately and improves cash flow timing.
Quota share treaties create ongoing administrative burden. Reinsurers must monitor ceded premium, track ceded losses, calculate experience adjustments quarterly or annually, and process commission adjustments. Automation significantly reduces this administrative cost.
Quota Share Administration Challenge
Quota share treaties require continuous monitoring of premium flows, loss submissions, and experience versus expectations. Year-end experience adjustments require detailed loss analysis and commission recalculation. Manual processes are time-consuming and error-prone.
Automated Quota Share Management
Automation systems track quota share treaties end-to-end. They receive premium and loss submissions, calculate commission accruals automatically, monitor experience against business plan, calculate experience adjustments quarterly, and route payments with supporting documentation. A Paris reinsurer achieved 70% reduction in quota share administration costs.
- Automated premium and loss tracking
- 70% reduction in administration costs
- Real-time experience monitoring
- Accurate experience adjustment calculation
Cash Flow Timing Optimization
Accurate, timely experience adjustments improve cash flow. Cedents appreciate precise, well-documented calculations. Automating these processes strengthens relationships and reduces disputes.
Conclusion
Quota share administration is a perfect use case for automation. Automated systems handle ongoing monitoring, commission calculations, and experience adjustments, freeing underwriting teams to focus on portfolio strategy rather than administrative details.
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