Reserve risk is perhaps the largest risk on many insurers' balance sheet, as it affects both solvency and earnings. The biggest driver of reserve deficiencies are changes in calendar-year trends, such as increases in inflation. This means the capability to measure inflationary trends in insurers' loss triangles is crucial nowadays.
With this in mind, Guy Carpenter & Company, LLC, has introduced MetaRisk Reserve 3.0, the latest iteration of its reserve risk modeling tool. The global risk and reinsurance specialist and member of Marsh & McLennan Companies (NYSE: MMC) says the new version also features improved Solvency II reporting and other enhancements intended to help insurance organizations stay compliant with rating agency and ORSA requirements.
This version has also been integrated with MetaRisk 7.2®, Guy Carpenter's premier risk and capital management decision-making tool, to produce reserve event files.
"MetaRisk Reserve 3.0 is the latest example of [our] commitment to improvements in technology as insurance companies look for every competitive advantage in the increasingly complex global insurance environment," says Don Mango, vice chairman and head of enterprise analytics for Guy Carpenter.
Earlier this year, Guy Carpenter secured a U.S. patent for the system's mode of determining loss reserves. Using MetaRisk Reserve 3.0, companies can capture historical economic trends (such as inflation) to better understand how those trends can impact their loss reserves. In turn, insurers can achieve a more transparent view of reserve positions, according to the company.
The predictive modeling capabilities of MetaRisk can help companies quantify reserve risk and consequently, allocate capital more effectively, refine reinsurance strategies, and improve enterprise risk management.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
