This presentation has been prepared for the 2016 General ... · This presentation has been prepared for the 2016 General Insurance Seminar. ... reviews, drone and camera footage •

This presentation has been prepared for the 2016 General Insurance Seminar.The Institute Council wishes it to be understood that opinions put forward herein are not necessarily

those of the Institute and the Council is not responsible for those opinions.



Chasing the Shorter Tail

Examination of the Life Cycle of Claims and Interaction with

Reserving



Introduction and Key Findings

The Claims Process

Future Horizons

Impacts on Actuarial Reserving



Looking Beyond Triangles



Changing Life Cycles and Their Impact



A World of Analytics



What did we find?

Multiple facets

Speed is the main change – technology is the driver

Unaligned statutory reserving and business monitoring

Data and analytics - opportunity and challenge

Future short tail reserving process unclear




The Claims Process

Future Horizons




Short Tail Claim Life Cycle



Understanding the evolution of the claim life cycle• Research

• IAG Interviews: Supply Chain, Operations, Claims, Recoveries, Actuarial

• Day in the life

• Evolution

• Forewarnings and prevention

• Lodgement – Post, Telephone, E-mail, Online, App-Based

• Assessment and Repair – Workflow management systems, repair networks, desktop reviews, drone and camera footage

• Process remains similar, but life cycle has ‘compressed’ thanks to technology

• Technological advancements valuable to customer and insurer – how about for

reserving actuaries?



Case Study: Wye River Bushfire (2015)• Overview – why use drones?

o Reduce delays for insurers and policyholders

accessing homes

o Customer Benefits: Fast-track assessment process,

simpler and faster response from insurers

• Reserving for half-year reporting

o Can technology improvements in the claim life cycle

assist with reserving?

o Combination of policy in-force maps, drone footage

and sum insureds

• Benefits

o Agile, accurate reserves, value-adding actuarial

insights to business

o Faster reporting to ICA and investor market

Source: http://www.iag.com.au/drones-take-flight-assess-damage-australian-insurer-first



Introduction and Key Learnings

The Claims Process

Future Horizons




That was 2015, 2016… What does the future hold?

• Future technologies that may impact claim process and reserving

o Incident – Driverless cars, Connected Homes,

Internet of Things

o Lodgement – Bots, Blockchain, Wearables

o Assessment & Repair – Drones, 3D printing, peer-

to-peer insurance

• Impacts on reserving – specific examples

o Incident and Lodgement – Connected Homes

o Lodgement and Workflow – Bots

o Assessment & Repair – Drones



But… Triangles?• How do we incorporate this in our reserving processes? Do we need to?

o Reserving Data

o Summarising claims data to a triangle means we lose granularity and potentially valuable information

o What does drone data look like? Driverless car data?

o Frequency of Data

?



Instantaneous reserving – what, why and why not?

• Claim Process – evolving

• Technology is enabling a faster, more compressed and data-rich process

• More documented process – live reporting at each stage of claim life cycle; incident, lodgement,

assessment, repair, finalisation

• Could we tap in to these live data feeds? Information within live reporting would likely influence the level

of reserves at any point in time

• Reserving process – to evolve or not to evolve?

• More frequent reserving – daily?

• Why not instantaneous if we can utilise live reporting?

• Live view on P&L, reserving insights correlate to underlying claims experience




The Claims Process

Future Horizons




Impacts on Short Tail Reserving

Changing patterns

Reliance on data

More operational information

Appetite for faster

reserving

Disappearing IBNR

Triangles vsother

Automation? New risks



How About Data?



The role of the reserving actuary....

board

customer

APRA

actuary

?



Questions? Comments?



Thankyou

Ryan Anderson Sonia Tripolitano



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https://www.itu.int/rec/T-REC-Y.2060-201206-I

• D. Oryzak, A. Verma (2015) – Insurance 2.0; Insuring the sharing economy and sharing the insurance economy.

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• G. Taylor, G. McGuire (2004) – Loss Reserving with GLMS: A Case Study.

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• http://thenextweb.com/entrepreneur/2016/08/09/12-sci-fi-technologies-already-changing-way-live/

• http://www.actuaries.asn.au/Library/Events/ASTINAFIRERMColloquium/2015/ASTINSYNOPSIS12Implementingthe.pdf

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• White, Khayatt, Woodfield (Oliver Wyman) 2011 Handle with Care; A diagnosis of the challenges in corporate claims management

https://www.itu.int/rec/T-REC-Y.2060-201206-I

http://thenextweb.com/entrepreneur/2016/08/09/12-sci-fi-technologies-already-changing-way-live/

http://www.actuaries.asn.au/Library/Events/ASTINAFIRERMColloquium/2015/ASTINSYNOPSIS12Implementingthe.pdf

http://www.apra.gov.au/CrossIndustry/Documents/160621-Role-of-the-Appointed-Actuary-Discussion-Paper.pdf