Although insurance-linked securities (ILS) and reinsurance have traditionally involved multiple parties, the supporting infrastructure for both has continued to be disjointed. In light of this, the concept of a shared platform and a cohesive data layer for contracts would not merely enhance efficiency; it would also establish a foundation for alignment and trust throughout the entire transaction lifecycle, according to Umair Rasool, General Manager, Korra.
During a recent interview with Artemis, Rasool proposes the case for a common platform and unified data layer for reinsurance and ILS.
“P&C reinsurance and insurance-linked securities (ILS) transactions are inherently multi-party. A reinsurance transaction often has multiple reinsurance contracts linked to it, which connects MGAs, fronting carriers, brokers, reinsurers, and ILS investors. Each party depends on the contract not only to understand coverage terms and scope but also to enforce those terms across the transaction lifecycle as claims come in,” Rasool said.
“While the reinsurance contract exists as a single source of truth in a PDF, it often does not function that way in practice. Each party interacts with the contract differently as they integrate contract data into their own systems and downstream workflows, often in isolation. While the agreement itself is consistent, the operational understanding of it quickly diverges, leading to discrepancies in cession calculations, collateral balances and trust account reconciliations.”
Rasool goes on to note that this divergence creates what can be thought of as an interpretation gap, with even small differences regarding how contract terms are understood can lead to meaningful downstream impacts resulting in inaccurate claims payouts.
He also explained how oftentimes, this divergence stems from operational realities.
“The individuals responsible for applying contract terms are not always the same ones who negotiated or signed the agreement. Small errors can be introduced in interpreting provisions or in failing to fully incorporate related new documents such as contract amendments and addendums. Given bandwidth constraints and the time and cost required to sift through complex agreements, no single party is immune to misinterpretation,” Rasool continued.
“Reinsurance contracts are inherently complex, often bespoke, and filled with nuanced legal language. While technology offers solutions, challenges persist when parties rely on fragmented systems (often legacy or homegrown), fail to carry forward transaction data consistently, or overlook follow-on documents. The result is discrepancies in how contract terms are applied and how payables and receivables are calculated across counterparties.”
Delving deeper into the technological challenges, the issue is exacerbated by fragmented systems.
However, as Rasool points out, in certain instances, teams have adopted tools designed to extract contract data and enhance its searchability, even allowing users to query agreements via chat-based interfaces. Although these tools can facilitate access to information, they often lack domain-specific training on reinsurance contracts, rendering them unreliable for interpreting intricate, customised provisions.
“As a result, teams may gain some efficiencies in finding the right information, but they still spend time manually applying contract terms to bordereaux and generating cession statements. This introduces delays, creates additional room for error, and ultimately is not an effective use of time,” Rasool noted.
He continued: “Addressing this challenge requires more than making contracts accessible or searchable. It requires a common platform and a unified data layer that establish a consistent baseline for how contract terms are extracted and applied across operational workflows such as cession summary generation.”
When all parties are operating within a common platform, the likelihood of contract terms being extracted consistently increases significantly.
Rather than having each counterparty individually extract and interpret terms, a common framework exists for capturing essential data. Although the system facilitates the initial extraction and coding of terms, teams retain the ability to review and adjust that output to align with their own interpretations. According to Rasool, this process allows them to begin from a uniform baseline instead of starting from the ground up.
“Equally important is the unified data layer. Upstream data flows seamlessly downstream without being lost, duplicated, or re‑entered. Bordereaux claims and policy data remains connected to the contract as part of the same schema, allowing users to apply contract terms directly to a new bordereau file to automatically generate cession summaries, and ensure contract-compliant collateral calculations without manual reconciliation across systems,” he added.
“Together, these capabilities increase the likelihood of a shared operational view of the agreement. Contract terms are not just stored or searchable, they are more likely to be coded consistently across parties, more transparently understood, and embedded directly into the workflows that govern the transaction.”
Rasool further went on to note: “Reinsurance and ILS have always been a multi-party business, but the infrastructure supporting it has remained fragmented. A common platform and a unified data layer for contracts is not simply an efficiency improvement. It is the foundation for alignment, transparency, and trust across the entire transaction lifecycle.”
This proposed platform offers several specific benefits to ILS investors and alternative capital providers. By converting unstructured PDFs into structured, queryable data, it saves hours of manual work. Instead of sifting through lengthy legal documents, users can ask questions in natural language to get immediate clarity on reinsurance terms, clauses, and metrics.
“It can also ensure that contract terms are applied consistently and avoid incorrect overpayments; which for cedents, this can improve claims recoverables. Integrating contract data with downstream systems like financial reporting also reduces errors and minimises the IT effort required to build and maintain costly integrations,” Rasool further added.
It will also help to enable further scale and growth within the ILS market.
“As the asset class expands beyond catastrophe into casualty and specialty, institutional investors will require infrastructure that supports repeatability, transparency, and auditability,” he added.
