This is the last in our series of articles around data quality and approaching the insurance market. I hope they have been useful in terms of setting out what Trustees should think about, and how we do things here at Spence.
At this point in our journey of seeking insurance we have carried out a data audit and benefit audit, we have a legally signed off benefit specification, we have filled any data gaps and monitored completeness/accuracy of data over time, and we have completed our GMP (Guaranteed Minimum Pension) equalisation project.
So, what’s next?
When you are ready to approach the insurance market you need to send data to the insurer along with your final benefit specification. It is helpful to have a flexible administration system where you can create a data download to exactly match insurer requirements, but to also exactly match the benefit specification. This ensures efficiency and reduces risk of misinterpretation.
During the data cleanse process, the insurer will query anything in the data that looks unusual. At this point, one of the biggest risks for Trustees is a significant data issue that adds to the premium or throws the timelines of the process off track. It is therefore important that all of the preparatory data work mentioned above is done to minimise this risk.
When dealing with the insurer it is important to have a team in place that have experience in data cleansing. This is a specialist skill set and not having an experienced team can often cause delays. Spence are on the Pension Protection Fund administration panel which means that we are involved in the transition of administration services for schemes entering the PPF. Part of this process is transitioning and cleansing data. We have a dedicated team that do this and as such our experience in this area is unrivalled in the industry. We use this dedicated project team when taking our ongoing schemes to the insurance market.
When you have your final dataset, the insurer will provide a final price with (hopefully) a minimal adjustment premium. Advisors should keep Trustees up to date throughout the process with estimates of any additional premium, and a check of the final premium once received.
Taking a scheme to market is a huge project that really benefits from efficient systems, an experienced team and ultimately – good data!