What is reinsurance and what does a reinsurance accountant do?

Reinsurance is insurance for insurance companies. Insurers pay part of the premiums that they collect from policyholders to a reinsurance company and the reinsurance company agrees to cover losses above certain high limits. The purpose of reinsurance is to limit the amount of loss an insurer can potentially suffer, protecting them from bankruptcy (and their customers from uncovered losses).

Reinsurance accountants have responsibility for the accounting and financial reporting of reinsurance - this includes the booking of reinsurance premiums and losses, financial reporting and cash clearing and settlement.

Key responsibilities

Responsibilities will vary, but examples include:

  • Work alongside underwriters to review complex reinsurance transactions from an accounting perspective
  • Record reinsurance payables and receivables in the general ledger
  • Reconcile cash payments received from reinsurers with established receivables to ensure appropriate entries in the general ledger
  • Effectively reconcile all reinsurance activity (reinsurance payable and recoverable accounts), identifying and analysing issues and proposing any corrective actions required
  • Collaborates closely with the middle office function to ensure the financial statements reflect the activity actually being disbursed, invoiced and collected
  • Assists with reinsurance-related ad hoc queries
  • Performs analysis to provide senior management with insight into large or unusual fluctuations
  • Identifies and evaluates opportunities for process improvements to gain efficiencies and improve the flow of information between parties

Why are they important?

Reinsurance plays a key role in the Insurance markets by limiting the risk and loss an insurer can potentially suffer and providing protection for the consumer. Well trained reinsurance accountants ensure that transactions are accurately recorded and the financial data on which important decisions are made is sound.

Skills needed for this role

Reinsurance accountants are typically professionally qualified. The role requires someone who is a highly motivated self-starter with strong analytical skills. A solid grasp of both reinsurance and accounting concepts is also essential in order to bridge the gap between the reinsurance operations and the related accounting and financial reporting.

Strategic Professional Options examinations linked to this role

Advanced Audit and Assurance

Career opportunities presented by this role:

This is a specialised area of accounting which commands a good compensation package.

Competencies

High level competencies required include:

  • Audit and assurance

    A. Advises on and communicates effectively the role and scope of audit and assurance engagements to relevant stakeholders.

    B. Applies regulatory, legal, professional and ethical standards relating to audit and assurance engagements.

    C. Plans and prepares for audit and assurance engagements.

    D. Performs effective audit, and assurance engagements.

    E. Reviews and reports on the findings of audit and assurance engagements.

    F. Guiding efficient and effective operations.

     

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

     

     

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.
     

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.