The Benefits of Automation in Loss Reserving
Each reporting period, far too much of actuaries’ time is spent performing routine tasks like adding or deleting diagonals from loss triangles, dragging and dropping formulas, relinking a complicated web of spreadsheets, and then checking that all the templates are up to date, in sync, and consistent.
With hundreds of diagnostics feeding through dozens of data triangles, an incremental change, even to just one or two projects, makes updates much riskier in the next period. With barely enough time to complete the essential regulatory and financial requirements, actuaries are often forced to sidestep deep dives that could uncover subtle inconsistencies and rush through estimates that merely pass as “good enough.”
All these manual operations result in a misuse of valuable resources on admittedly important but repetitive tasks, discouraging change and innovative analysis that can shed light onto an insurer’s risks.
At the same time, regulatory and market forces have raised the bar on the level of sophistication expected in insurers’ analyses.
Automating the reserving process enables actuaries to dedicate more time to delivering meaningful value within the insurance organization. Instead of spending effort on manual tasks, actuaries can concentrate on spotting trends, investigating anomalies, performing deeper analytical reviews, and applying their actuarial expertise to interpret and enhance the insights produced.
