Experience, reserving, pricing and solvency

The Actuarial menu is for the actuary and finance: experience, reserving, pricing, forecasting, catastrophe exposure and solvency. It needs the Actuarial module (Company settings) and the actuarial permissions; the starter role Actuary has them.

Experience

Actuarial > Experience shows, for a period, the policies, exposure (in policy-years), earned premium, claims, frequency, average cost and loss ratio, by year, quarter, line, product, channel, branch or region. Filters narrow it to one line or product. Excel downloads it.

Reserve studies

Actuarial > Reserve studies > Run a study builds a claims triangle for a line (paid, incurred or claim counts, by year or quarter, as at a date) and projects it:

• Chain ladder: from the development factors of the triangle.
• Bornhuetter-Ferguson: mixes the chain ladder with an expected loss ratio, which steadies the young years.
• Expected loss ratio: the earned premium times the ratio given.

The study shows the triangle, the factors (simple and weighted average), the ultimate claims, the IBNR by origin and in total. Run again with other factors lets you choose your own factors and a tail.

A study is approved by someone other than the person who ran it. Once approved, it replaces any earlier approved study for the line, and the month-end reserve valuation uses its IBNR when the line's IBNR method is From the approved study.

Pricing workspace

Actuarial > Pricing workspace > New scenario tries changes to a product: a different base rate, rating rule values or minimum premium. Test re-prices the policies in force with the changes and shows the change in total premium and how many policies go up or down by how much. Testing changes nothing. Apply to the product makes the changes for new business and renewals.

Forecasts

Actuarial > Forecasts > New forecast projects premium, claims, expenses and result month by month from the last two years, with your growth, loss ratio and expense ratio, and a stressed result with a catastrophe loss.

Catastrophe scenarios

Actuarial > Catastrophe scenarios > New scenario applies a damage ratio to each hazard zone and works out the gross loss on the locations insured, what the catastrophe treaties recover and what is retained.

Solvency

Actuarial > Solvency > Calculate works out a standard-formula solvency requirement from premium and reserve risk by line, the worst catastrophe scenario, market risk on investments, counterparty risk on reinsurers and premiums owed, and operational risk, combined with correlations, and compares it to own funds from the balance sheet. How it is made up shows each part.

Limits

These are working tools with simple, transparent methods. They do not replace an actuarial valuation signed by a qualified actuary, and the solvency figure follows a simplified standard formula, not the full rules of any regulator.