Custom System Development for Modeling Future Cash Flows in Insurance Contracts
Client: a major international insurance company offering protection to individuals and businesses since 1947
Objectives
Develop a high-performance solution to replace ResQ, capable of handling complex calculations with high granularity
Create an advanced system for estimating future cash flows from insurance contracts, using multiple calculation techniques
Solution
Leveraging the B1 Graph accelerator, we built and deployed a powerful system to calculate future cash flows, including loss reserve estimates
The solution spans a wide range of applications, from non-life and life insurance to pension insurance and long-term savings plans
Designed for ease of use, the system enables users to build and modify calculation models without needing any programming knowledge
Cash flows for loss reserves are estimated using both deterministic and stochastic methods, such as the Chain Ladder, Bornhuetter-Ferguson, frequency and severity, independent increments, bootstrap, naive loss ratio, and the Cape Cod Model
The resulting data feeds directly into IFRS reporting processes
Project outcomes
A high-performance tool was developed on the B1 Graph accelerator, tailored to the client’s specific needs and leveraging in-depth expertise in actuary calculation methodologies
Fast processing of vast datasets: just 40 minutes to calculate metrics for 250 million contracts over 1,200 periods