Healthcare reserving


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Insurance companies, regulators, reinsurers, rating agencies, self-insurers and others come to Milliman for reserve evaluations. Our independence and depth of insight in actuarial analysis provide clients with a meaningful and powerful understanding of potential liabilities. Our experts perform sophisticated calculations to discern historical and future patterns that will affect an insurer's reserve requirements.

We provide more than just the answers

The value of our work stems from the sophistication of our actuarial projections and the clear communication of our results. We help clients understand what is at stake in the reserve evaluation, identifying key assumptions, explaining the potential variability and describing the implications to our client.

For any reserve analysis, Milliman offers:

  • Unparalleled experience and expertise
  • Proprietary state-of-the-art loss projection tools
  • Unwavering commitment to provide invaluable insight, integrity and independence in our work
  • Reports that are clear, concise and informative
  • Software solutions

Our CREW model is an Excel-based tool used for estimating incurred but not paid (IBNP) values for healthcare-related entities. CREW is a template that performs a series of actuarial claim reserve calculations using a client's claims and exposure data. It organises claims data in a triangle by paid month and incurred month. This interactive tool allows the user to play an important role in the IBNP process, mainly through the selection and input of key assumptions.

In the UK, a current use of the CREW model is in assisting the derivation of the claims provisions used in the calculation of the technical provisions for medical insurers per the regulation on Solvency II requirements. It helps to inform the level of reserve required from a risk-bearing entity under an actuarial best estimate.

The CREW model implements two reserving methods and requires the user to select appropriate weighs for the two methods:

1. Lag development method

2. Projection of ultimate incurred method

The flexibility around the tool allows users to review and select completion factors, exposure basis and unit cost seasonality and trend rates. In addition, CREW can test the sensitivity of the IBNP estimates to different sets of assumptions.

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