As part of the preparation for the GI TORP Working Party presentation to the 2017 GIRO conference in October, the working party carried out a survey covering the level of automation used in general insurance reserving processes. This survey focused on the timescales and pressures of the reserving cycle and the current state of play relating to the prevalence of manual processes and the penetration of proprietary software. It looked at automation techniques as a mechanism for relieving the pressures on the reserving process resulting from solvency 2, the reserving cycle, IFRS and the pressure for faster close processes.

Download the results of the survey

Summary of Results

  • The total number of survey participants was 39, among which:
    • 50% are personal lines insurers
    • 40% are Lloyd’s/London Market insurers
    • 10% are reinsurers or health insurers
       
  • About 2/3 of the participants are doing business mainly in the UK (some of which also in other European countries), and about 1/4 have US operations
     
  • There was a good balance of small, medium and large firms in terms of Gross SII TP volumes
    • 25% less than £100m
    • 20% between £100m and £500m
    • 20% between £500m and £1bn
    • 35% more than £1bn
       
  • Regarding their reserving process, the participants currently use:
    • An-off-the-shelf product from a software supplier -> about 50%
    • Excel spreadsheets (exclusively) -> about 25%
    • An internally-built/coded platform (potentially combined with spreadsheets and other software) -> about 25%

It is worth noting that, within the group of firms that only use Excel spreadsheets for their reserving, half of them are actually very large firms from a gross solvency 2 technical provision perspective (SII TPs > £1bn) while the others are composed of small and medium firms.

  • Automation: Regarding the level of automation of their current reserving process, the responses have been:
    • 50% as being '50 manual and 50% automated'
    • 30% as being mostly manual or not automated at all
    • 20% as being mostly automated with little manual work needed

It is worth noting that approximately 1/3 of the participants using an off-the-shelf reserving platform have described their process as being 'mostly manual' while the remaining 2/3 have responded '50% manual and 50% automated.' However, within those exclusively using spreadsheets, only 1/4 have considered their process to be 'mostly manual', which might show that using a dedicated software package doesn't seem to solve most of the challenges related to automation even compared to spreadsheets. This appears to be consistent with the point that 90% of all the participants have responded 'Yes' or 'Maybe' to the question, ' Given time, would you like to invest in further automation of your reserving process?', disregarding what tools or platforms they are using.

  • Based on the other results (incl. open-ended responses) also received, the main outcomes to highlight relate to the following items:
     
    • Data Quality – This appears to be the main issue for most participants. Data quality is often not very good, it often needs to be processed at a significant level (for 3/4 of the participants) when coming from Management Information/Information Technology or from other teams, and it is not always consistent between quarters (e.g. quarter on quarter data formatting changes are common place). Data Quality arguably represents the main area of improvement as evidenced by the responses, with  of the participants considering 'data processing as an essential area of improvement regarding automation'
       
    • Level of Automation – There remains a significant volume of manual work needed by reserving actuaries (e.g. regarding data processing, ultimate claims selections, model blending, movement analyses from a quarter to another). Most participants would like to see an increased level of automation to allow for more time to do analyses and in-depth reserve review (but also reduce manual mistakes due to “tedious” tasks that must be achieved). Nevertheless, a few participants have said that there shouldn’t be too much automation – some is needed to provide first cuts/validation, but it always will be overlaid by manual adjustments and elements of expert judgement
       
    • Reporting – Reporting processes are mostly manual at the moment for almost 50% of the participants.  This seems to be the other major challenge regarding automation alongside data quality. In particular: QRTs, translation from GAAP/IFRS reserves to SII TPs and PowerPoint presentations (to various committees) are the most manual tasks to do for reserving actuaries in terms of reporting. One of the participants mentioned the potential of data visualisation software like Tableau for reporting purposes.
       
    • IFRS 17 – This will be a major event which will increase the impetus for more automation within reserving processes for 75% of the participants. In particular, participants appear to want to try to use as much work as possible from SII for upcoming IFRS 17 implementation, and have a consistency between SII and IFRS 17 (e.g. regarding cash-flows)
       
    • Machine Learning – About 50% of the participants have responded 'Yes' or 'Maybe' when asked if they had already given any considerations to machine learning techniques applied to reserving (that includes both personal lines and Lloyd's/London Market insurers). It is seen as a great opportunity for them. However, a large majority have said that they are still in the very early/conceptual stages onl, and that they they are still a bit scpetical about it. This is mainly because f the level of complexity involved and the the technical skills that would be required to implement and maintain such models
       
    • Consequences of Automation – Most participants have said that automation would help do the 'tedious' work faster, reduce time/manual mistakes and allow for more time for deep analyses. A few of them, however, mentioned that currently most of the work performed by reserving actuaries actually relates to data/processing/manual tasks within their organisation, and on that perspective, automation could potentially reduce the need for reserving actuaries in the long term (hence the question of a possible reduction of Reserving sizes over time

Related documents

Contact Details

If you want more information about this research working party please contact the Communities Team.

professional.communities@actuaries.org.uk

Filter or search events

Start date
E.g., 24/08/2019
End date
E.g., 24/08/2019

Events calendar

  • IFoA & PRI Webinar: TCFD – leaders and challenges

    Online webinar
    2 September 2019

    Spaces available

    In collaboration with the Institute and Faculty of Actuaries, the Principles of Responsible Investment is delighted to host this webinar discussing the response to the TCFD’s recommendations two years on from their publication. The webinar will feature new analysis of the 591 investors representing $45 trillion who responded to PRI’s 2019 climate indicators, insights from the past Chair of the IFoA’s Resource and Environment Board as well as an investor case study of implementation in practice from Aviva. 

  • SIAS Event: Climate Zero to Climate Hero

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    3 September 2019

    Spaces available

    An introductory session to help you get ahead with climate change.

    • Science, terminology and initiatives: handy facts to keep in your back pocket 
    • Getting your point across: how to influence people and avoid common traps and pitfalls
    • Taking action: what are actuaries expected to do...and what are we actually doing?
  • KSS event – The Regulatory Perspective

    Deloitte Saltire Court 20 Castle Terrace Edinburgh EH1 2EG
    5 September 2019

    Spaces available

    This KSS talk, presented by the FCA Head of Department in Scotland, will focus on the following 3 main areas:

    • FCA business plan priorities
    • The future of regulation
    • FCA Engagement in Scotland
  • Professional Skills Training session (Jointly held with China Life)

    China Life Insurance, Beijing •  China Life Shanghai Office • China Life Shenzhen Office  
    6 September 2019

    Spaces available

    Friday, 6 September, Beijing Local Time (CST) 14.00-16.30; British Summer Time (BST) 07.00-9.30

    The IFoA Beijing Office and China Life are pleased to be co-hosting a Professional Skills Training (PST) session in Beijing, Shanghai and Shenzhen on Friday, 6 September. Wen Li (FIA), the IFoA Lead Representative in China and East Asia, will lead the PST presentation and discussion on ‘Getting it right!’.

    The main venue will be in Beijing. Members in Shanghai and Shenzhen can join the interaction with Beijing via video conference at China Life’s regional venues. (see full details below)

  • Spaces available

    The actuarial profession has much to offer the world of banking. In this second webinar on opportunities for actuaries in banking we have two actuaries sharing their experience. They will talk about the opportunities there are in banking; describing the actuarial aspects of the work they do, the roles they see for actuaries and the skills actuaries can bring to the banking industry. They will share their experiences of how they got into banking as well as give their thoughts on how actuaries can enter the banking profession.

  • KSS event – The Future of the Actuarial Profession with Alan Watson

    Willis Towers Watson 2 Lochrin Square, 96 Fountainbridge, Edinburgh EH3 9QA
    23 September 2019

    Spaces available

    This KSS talk will explore how the Actuarial Profession is changing by looking at the past, the current and the future; considering what will be the key issues impacting the Profession over the next 20 years and why this will be different from today. Why will areas like data science be important?  What does the future hold for reserved roles? What impact will the Profession have on other professionals?  And much more!

  • GIRO Conference 2019

    EICC, The Exchange, 150 Morrison St, Edinburgh EH3 8EE
    24-26 September 2019
    Spaces available

    GIRO is attended annually by over 800 delegates and speakers who are keen to discuss key topics such as Pricing, Reserving, Modelling and the future of the insurance industry. GIRO 2018 was a huge success and we have opened bookings early for what we hope will be another brilliant conference at the EICC in Edinburgh this year. 

    `

  • Chief Actuaries and Senior Life Actuaries Workshop 2019

    Staple Inn Hall High Holborn London WC1V 7QJ
    2 October 2019

    Spaces available

    This workshop, now in its sixth year, is aimed at senior actuaries working in life insurance - predominantly Chief Actuaries, but also Reviewing Actuaries and others working in risk and financial reporting. It will provide seven hours of relevant CPD.

  • The Future of the Actuarial Profession

    Staple Inn Hall, High Holborn London WC1V 7QJ
    3 October 2019

    Fully booked.

     

    Three actuaries – and CEOs – discuss their views on how the business world is changing and what that might mean for actuaries in the future.

  • Spaces available

    Have you ever thought about working in wider fields? Would you like to play a role in the fight against climate change to make the planet better? 

    It can be difficult to do this - but seeing an example you can follow can make it more realistic. In this ‘green’ case study a template is outlined to show how actuaries can apply their skills more broadly - and in doing so, to make a difference.

  • RSS/IFoA Data Science Ethics: the role of practitioners

    Royal Statistical Society, 12 Errol St, London EC1Y 8LX
    7 October 2019

    Spaces available

    The Institute and Faculty of Actuaries and the Royal Statistical Society have worked together to develop joint ethics guidance on data science. This is the culmination of an 18 month programme of practitioner led work. 
     
    Join us for the launch of this new guidance, with a high-level panel discussion which will explore the role of data science practitioners and professional bodies in data ethics. 

  • SIAS Event: AGM and talk on a Monetary Approach to Economics

    Staple Inn Hall. High Holborn, London, WC1V 7QJ
    8 October 2019

    Spaces available

    The SIAS Annual General Meeting will commence at 5.45pm and be followed by a talk given by the well known economist and author, Steve Keen, at 6pm. A live webinar will be available. 

  • Career Event - Count Me In

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    10 October 2019

    Spaces available

    This event is aimed at school age young people to encourage then into the profession

  • KSS Event – GAD: the 100 year life (Edinburgh)

    KPMG  Saltire Court 20 Castle Terrace Edinburgh EH1 2EG
    22 October 2019

    Spaces available

    The Government Actuary’s Department (GAD) marks its centenary this year. George Russell, formerly Deputy Government Actuary, who currently heads up GAD’s Edinburgh office, leading on GAD support to the devolved administrations in Scotland and Northern Ireland, will outline GAD’s development over that period and its range of work today. Having just “celebrated” his 25th anniversary of joining GAD, George will also reflect on some of the challenges and opportunities of advising at the interface of the actuarial and the political worlds.

  • KSS event – GAD: the 100 year life (Glasgow)

    Barnett Waddingham 163 West George Street, Glasgow, G2 2JJ
    24 October 2019

    Spaces available

    The Government Actuary’s Department (GAD) marks its centenary this year. George Russell, formerly Deputy Government Actuary, who currently heads up GAD’s Edinburgh office, leading on GAD support to the devolved administrations in Scotland and Northern Ireland, will outline GAD’s development over that period and its range of work today. Having just “celebrated” his 25th anniversary of joining GAD, George will also reflect on some of the challenges and opportunities of advising at the interface of the actuarial and the political worlds.

  • Sessional Meeting - Autonomous Vehicles and impacts on the wider insurance industry

    Staple Inn, High Holborn, London WC1V 7QJ         
    28 October 2019

    Spaces available

    The Institute and Faculty of Actuaries is running a sessional meeting on autonomous vehicles on 28th October.  The session will showcase the work of the IFoA “Autonomous Vehicles” working party alongside a number of expert external presenters. 

  • ARC Event: Beyond Proportional Hazards

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    30 October 2019

    Spaces available

    ARC Event: Beyond Proportional Hazards: Statistical methods for assessment of the impact of medical advances and health interventions on longevity and population projections.

    This workshop is being delivered by the Actuarial Research Centre’s (ARC) ‘Big Health and Actuarial Data’ Research Programme.

  • Hot Topics in Health and Care: Networking and Drinks

    Staple Inn, 4 High Holborn, London WC1V 6DR
    4 November 2019

    Spaces available

    This evening will feature two new cases studies that highlight the implications for insurers of issues impacting on health and mortality for life, pensions, and health and care products; Impactability modelling: a worked example in Type II diabetes presented by Josephine Robertson, and Seasonal Mortality in England and Wales 1993-2016 presented by Mary Hall, Dublin City University.

  • SIAS Event: Introduction to the Mortality Research Steering Committee (MRSC)

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    5 November 2019

    Spaces available

    The MRSC is responsible for guiding the profession’s research in the areas of longevity, mortality and morbidity such that it is recognised as a thought leader in this area. It has recently been reviewing what the priorities and have identified 6 areas that we believe are the most important areas of research that should be the current focus and these are:

  • The challenges for AI in Autonomous driving – Professor Andrew Blake

    Royal College of Physicians of Edinburgh, 11 Queen Street, Edinburgh, EH2 1JQ
    11 November 2019

    Spaces available

    In conjunction with the Scottish Board and supporting the IFoA’s focus on data science.

    The IFoA’s Scottish Board have arranged for UK pioneer in Computer Vision and Machine Intelligence, Professor Andrew Blake to speak to delegates on the subject of AI in Autonomous driving. This lecture will focus on safety-critical operation and the computation of risk.  

  • Autumn Pension Seminar

    Grand Connaught Rooms, 61-65 Great Queen St, Holborn, London WC2B 5DA
    13 November 2019

    Spaces available

    Join us for this brand new seminar that brings together our Current Issues in Pensions, Pensions and the Law, and Investment for Pension Actuaries events. The seminar builds on the IFoA’s Annual Pension Conference with sessions covering CDC, TPR’s code of practice, investments, legal updates and Professional Skills Training with a focus on interactive discussion throughout.

    • KSS event: How is Scotland’s population changing and what are the implications?

      Barnett Waddingham, 163 West George Street, Glasgow, G2 2JJ
      14 November 2019

      Spaces available

      The National Records of Scotland (NRS) collects, preserves and produces information about Scotland's people and history to inform current and future generations - work that underpins the fabric of Scottish society and tells the story of our nation. This KSS talk will explore the following and other areas impacting Scotland’s changing population, and assess the potential implications of the changes:

      • population statistics
      • life expectancy
      • changes in age structure
      • birth and death rates, including causes of death statistics.
    • Life Conference 2019

      The Convention Centre Dublin, Spencer Dock, North Wall Quay, Dublin 1
      20-22 November 2019
      Spaces available

      The Life Conference is the premier event for professionals interested in life insurance.  Offering a wide range of workshops and plenary sessions it’s the perfect opportunity to discover what’s hot and current in life insurance ensuring you get up to date on the latest thinking and innovation whilst meeting and exchanging ideas with a broad range of professionals.

    • Autumn Lecture 2019, London - Rt Hon Nicky Morgan MP

      Lincoln's Inn The Treasury Office, London WC2A 3TL
      2 December 2019

      Fully booked.

      The IFoA is pleased to announce that this year’s Autumn Lecture will feature the Rt Hon Nicky Morgan MP as its guest speaker.  Nicky has previously served as Financial Secretary to the Treasury and Minister for Women. She now chairs the Treasury Select Committee whose remit is to examine the expenditure, administration and policy of HM Treasury, along with all of its agencies and associated bodies.

    • Autumn Lecture 2019: Live Streaming

      Webinar 
      2 December 2019

      Spaces available

      Watch the live stream of this year's Autumn Lecture with guest speaker Rt Hon Nicky Morgan MP. 

    • Behavioural Finance Research Launch- 14 January 2020

      Staple Inn, 4 High Holborn, Holborn, London WC1V 6DR
      14 January 2020

      Spaces available

      We are delighted to announce the launch of the findings from our ARC funded Behavioural Finance research with a special evening event at Staple Inn on Tuesday14th January 2020. Entitled Behavioural Aspects of Institutional Investment Decision-Making, this research programme is being delivered by City, University of London, Leeds University Business School and Ipsos.

    • Sessional: Impact of E-cigarettes Working Party

      Royal College of Physicians, 9 Queen St, Edinburgh EH2 1JQ
      24 February 2020

      Spaces available

      This sessional meeting will be of direct interest to actuaries and others working in the in the Health and Care, Life or Pensions sectors or indeed an actuaries with an interest in morbidity or mortality.