Challenge
A client engaged Milliman to review their reserves and recommend process improvements for one of their Lloyd’s syndicates.
The primary limitation was the low volume of reported claims data, stemming from an evolving underwriting risk profile and shifting terms and conditions. Third-party benchmarking information was sparse, especially for coverage placed at higher excess points.
Approach
Assessment of existing reserving framework: We reviewed the methodologies employed in the client’s internal reserving analysis and by the statement of actuarial opinion provider. We also evaluated the assumptions and approaches, identifying strengths and areas for potential refinement.
Independent actuarial analysis: We applied common actuarial best practices and leveraged internal benchmark patterns where data was limited. We held discussions with underwriting, claims, pricing and reserving teams to identify and understand key risk drivers.
Process enhancements and recommendations: We proposed alternative reserving approaches and benchmarks tailored to the syndicate’s exposures and data environment.
Impact
Positive reception by key stakeholders: Milliman's findings and recommendations were presented to, and well received by, the client’s audit committee.
Strengthened reserving framework: The client’s chief actuary and the reserving team took the insights from the project on board to support improving reserving practices for continually evolving segments.
Informed benchmarking: By combining internal patterns and industry expertise with new benchmark data, the syndicate can now reserve more confidently despite data limitations.