13 October 2017


The implementation of the Solvency II, Pillar 3, regulation in January 2016, gave rise to a new requirement for insurers to report claims and risk information for the Annual Solvency Return (ASR). Pillar 3 highlights the requirements that relate to transparency and reports which need to be submitted to the supervisory authority. The requirement has placed pressure on insurance companies to ensure they receive the necessary information, in the form of bordereaux, and that data is accurate, auditable, easily accessible and interrogated in line with the regulation. However, due to the varied state of the data being received through bordereaux, many believe Pillar 3 comes with “technical complexities that could make it the trickiest to resolve”.

But what are bordereaux? Lloyd’s has defined bordereaux as “a list of premiums payable and claims paid or due which is prepared by a coverholder for a managing agent or by a reassured for its reinsurer”. Insurance companies and syndicates use bordereaux reports to record premium profit or loss data which are related to specific risks previously identified. They are particularly useful as they can provide an accurate summary of what an insurance book has achieved through listing individual premium transactions to, and claim payments from, underwriters.

Data recorded is often unreliable and difficult to interpret. Many bordereaux are not received in line with the standard format issued by Lloyd’s, resulting in ambiguous headings, poor data quality and often missing mandatory information. With the potential for vast amounts of information, including thousands of transactions being recorded on a single bordereau, a manual process to enter or filter the information can be time consuming, difficult to audit and can lead to incorrect results and assumptions.

Solutions for Bordereaux Management

In an effort to address issues with inconsistent data, software solutions for bordereaux processing and management have been created for the insurance market. These IT solutions are easy to use and designed to make the processing simple. The primary functions of the systems are to cleanse, check and validate data, standardising into a predetermined template. The solutions claim to provide reporting capabilities to increase transparency making risks visible, and to boost efficiency and profitability. Reports created can also assist managing agents to meet Solvency II requirements as well as influence underwriting decisions. These software providers have been highly popular in the market and have had a huge impact on helping companies meet deadlines for the regulatory requirements.

Following the implementation of a software solution, companies have two options for the management of their bordereaux. The first is to keep processes in house or outsource processing and chasing, error handling and reporting.

The Benefits of Bordereaux Managed Services

There are several benefits managing agents and underwriters can gain from bordereaux managed services. Most notably, outsourcing bordereaux management removes internal pressures on ensuring data meets Lloyd’s set standards.

On completion of the implementation, companies also have access to trained resources who can process backlogs in a timely and efficient manner without having an impact on other areas of business.

Perhaps most importantly, using a bordereaux managed service, managing agents can be confident that data reported is processed accurately on a consistent basis, even in times of high attrition.

Having bordereaux cleansed and processed has become a high priority for the market, and with an increasing urgency for insurance companies to be able to prove that their data is complete, accurate and appropriate, partnering IT solutions with managed services to achieve this has become an attractive resolution that can help to avoid any negative impact on the business as a whole.

[1] http://www.information-age.com/clock-ticking-insurers-get-handle-new-eu-data-rules-123459959/
[2] https://www.lloyds.com/common/help/glossary?Letter=B
[3] http://www.viprsolutions.com/about-us/
[4] http://www.viprsolutions.com/vipr-managed-service/