Xuber
CIT talks to Richard Clark of Xuber about why servicing the captive sector is a little different
How did Xuber come about?
We started life 30 years ago as two commercial insurance software houses that were bought by Rebus Insurance Solutions. In 2004, Xchanging bought Rebus and since then we’ve been the insurance software arm of Xchanging. In October, we rebranded the software business to Xuber, although we still remain part of the Xchanging group. We provide end-to-end administration systems to insurance companies, insurance brokers, reinsurance clients and captive managers.
Which of your products pertain to captives?
Genius, Iris, Elgar and Brokasure are the four end-to-end products on which we’ve built our business to date. We have recently launched the Xuber platform; a brand new software platform that assimilates and extends all of the functionality of the above four products.
In addition to these existing products, we have introduced new software products that are built on the powerful Xuber Platform—Xuber for Insurers and Xuber for Reinsurers—and in 2013 we will introduce Xuber for Brokers and Xuber for MGAs. They offer an unprecedented level of flexibility and configurability and the offerings can either be deployed as a fully integrated end-to-end solution or as separate functional components (for example, Policy).
If someone came to me looking for a reinsurance system, I’d assess what their needs are and which product set would best suit their business. Xuber for Reinsurers has flexible capabilities across the full-assumed reinsurance lifecycle and is offering the modern day reinsurer improved performance and rich functionality.
Going forward, we’re considering a configuration of our software for the captive market. Our existing products Genius and Iris have both been used by captives. But in the future, it would be a variant of Xuber for Reinsurers, with configuration to make it more applicable to the captive market.
How is servicing the captive sector different?
One of the difficult things about the captive market is finding the right solution for them. They tend to have to accept a system that is designed for another practitioner type being shoehorned into their organisation. Though we haven’t designed anything specific for the captive market as of yet, I’m confident that what we’ve got will enable us to come up with a variant and configuration for the captive market.
When you look into captives, there’s not just one market you’re looking at, and therefore you must attend to insurance captives, reinsurance captives and captive managers. Say I’m looking at the Bermuda market; one of their features is that a reinsurance captive writing very high level protections may actually have extremely small business volumes, even though the premium amounts that we’re dealing with are huge.
Historically, many reinsurance captives have ended up using little more than spreadsheets, and traditional insurance systems are akin to using a sledgehammer to crack a nut. People have found themselves using something that is far too powerful and far too geared up to high volume, low complexity than the job needs when you’re dealing with those high-level reinsurance captives.
A question in my mind is to what extent some of the regulatory changes, such as Solvency II, as a necessity for captives to be compliant has actually pushed captives more towards needing to get some more robust automation of their business, because I can see that as a driver.
I think the captive world can’t be too akin to the high volume business that you would find in a traditional insurance company. It needs to be something that handles highly complex risks and is very flexible and configurable, but in a way that the practitioner is not overwhelmed with something that from a user perspective, seems far too complicated for them.
The answer, I believe, is our new Xuber platform, which can address many of the things the market needs. For us to really enter into the arena, we need to configure a captive version, and we would be looking to partner up with someone that can give us a steer on how some of that configuration can happen. Again, there are people in the captive world that are also writing business on the open market, which is an interesting variant. They’ve got two views on life: one, around the risks that are coming from their parent, and two, balancing their book of business to write traditional business and competing with insurers that are not connected in a captive relationship.
For example, ICI, which has a captive that we provide a solution for, used to write quite a bit on the open market.
Regarding captive managers, one of their features that plays well to what we’ve got is the multi-company concept within our software. Our software is very international, so has multi-company, multi-currency, and multi-lines of business.
For a captive manager probably representing a large number of captives and needing to keep the right financial Chinese walls between the business for the different captives that they represent, is something which again the structure and architecture of our application will allow them to do.
Finally, our offering gives integrated outwards reinsurance, because most captives are being used as a vehicle to access the more appropriate covers that the reinsurance market would offer, whereas if they were just risk managers, they would be constrained to the insurance market. Again, the fact that we’re able to offer tightly integrated insurance and very powerful calculations around that plays well into the requirements of captive insurers
