Our client

London-based multinational RSA Insurance Group is a top global quoted insurance group that has been in operation for three centuries. RSA has major operations in Europe, Asia, Latin America and the Middle East, with the capability to write business in around 140 countries. The group was looking for a solution that improved its operations across its far-reaching geographic footprint and multiple subsidiaries.

The challenge

RSA was experiencing multiple cashflow challenges, particularly regarding the settlement of premiums and claims from its global network, processing internal treaties and recharging expenses.

The solution, however, had to be highly automated, avoiding the costs and error-risk of manual processes, as well as strongly consistent – around cash management and foreign exchange processes, for example. RSA was searching for a best-practice solution that could be applied harmoniously across the entire group to improve liquidity and transparency.

The solution

In partnership with Xchanging, Deutsche Bank launched its global net settlement platform for insurers and brokers, Netsett, in 2012.  

The award-winning, ACORD-certified platform uses structured data to exchange and settle accounting information in an automated and efficient manner. Leveraging Deutsche Bank’s world-class expertise and capabilities, and the best practices of the London Market, this solution is built to enable treasury improvements for the $3 trillion global insurance market.

The solution was initially designed to simplify the accounting and settlement of reinsurance treaties between different groups, but has proven to be effective for intra-group operations as well. Netsett offers enhanced liquidity and operational cost savings; the pilot verified that Netsett can deliver an 80% improvement in capital efficiency and a 50% reduction in operation activity with zero unreconciled cash or ledger items.

Benefits

The result of the RSA pilot was a significant, measurable streamlining of operations. Concerning processes, RSA has seen both the number of steps and the people involved halve for each transaction, and its settlement cycle shrank drastically from six down to two weeks. From the perspective of financial operations, banking fees have been considerably reduced and bank accounts rationalised, as well as a reduction of 80% in the payments workflow.

The solution proved to have further reaching benefits, as it catalysed the standardisation of treasury processes within the group, improving the visibility and certainty crucial to effective cash management. RSA’s foreign exchange requirements are executed on a competitive basis and the data of any flow in any currency is quickly accessible and can be leveraged for forecasting and liquidity management purposes.

Results

By the end of the year, RSA plans to have rolled Netsett out for its largest subsidiaries in Canada, Scandinavia and Europe. But it sees the solution as one that should eventually be used for all movements of transactional cash across the group – including to process all internal treaties and recharges, the efficient reallocation of expenses and intra-company transactions.

“In launching Netsett, Xchanging and Deutsche Bank have together demonstrated a much-needed awareness and insight into market issues, as well as the technical ability and innovative mindset to address them. We now plan to put the product to full use, and are expecting to see very substantial benefits across the RSA Group.” – Jason Roberts, Global Reinsurance Finance Business Partner at RSA.

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