Xchanging and Deutsche Bank have launched the pilot phase of the new global (re)insurance and accounting net settlement service, Netsett.

Netsett is Xchanging’s new global initiative that uses structured data to enable organisations to exchange and settle accounting information. Xchanging believes Netsett will transform the accounting and settlement processes of the global insurance market.

It is their hope that use of this solution will act as a catalyst for change and provide the opportunity to achieve significant benefits across participating organisations.

The solution uses Xchanging’s existing message management technology combined with a central reference ledger for the storage and agreement of transactions. Deutsche Bank’s global transaction banking, clearing and FX capability powers the netting and settlement process and facilitates a single, netted payment for all counterparty liabilities in each settlement cycle.

Xchanging and Deutsche Bank worked together to develop this service, with support from the International Underwriting Association and ACORD. And, in addition to working with RSA to validate and refine the operating model for the solution, Xchanging and Deutsche Bank are also looking to roll out pilots with Aon and Transatlantic Re.

“Xchanging are leaders in the use of standard, structured data to facilitate back office processing,” says Max Pell, managing director at Xchanging. “In our partnership with Deutsche Bank, a leading global bank, we have the ability to offer a utility that delivers real and lasting commercial value to the insurance market. The solution enables organisations to exchange ACORD messages for both premiums and claims. Deutsche Bank will handle all client money and power a settlement cycle that will enable financial transactions to be netted between participating counterparties”

Michael Spiegel, global head of trade finance and cash management corporates, global transaction banking, Deutsche Bank continues: “As a leading provider of financial services solutions to the insurance industry, we were delighted to be selected as partner by Xchanging. Based on our platform strength, technical expertise and renowned FX capability, coupled with our extensive global network, we are well-positioned to power the Netsett solution. We look forward to building on our strong relationship to deliver transformational change to the insurance sector.”

“The features of the Netsett solution have the potential to address long-term issues in the management of balances across multiple currencies between counterparties,” adds Dan Ferguson, treasury manager, RSA. “We believe it will improve the management of our cash-flow, reduce demand for liquidity, especially in volatile currencies and reduce our exposure to FX risk. This is in addition to the efficiencies that we will gain from using structured data rather than manual processes to agree and settle balances between our subsidiary balances.”

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