Redesigning the Actuarial Experience Study
Summary:
DEA partnered with a Disability Income Insurance Company to redesign the experience study processes, enhance technology support and identify new ways of managing the business itself.
Client Profile:
A mid-size life and disability income insurance company that specializes in products that are excellent for highly skilled professionals, executives and business owners.mid-size life and disability income insurance company that specializes in products that are excellent for highly skilled professionals, executives and business owners.
The Challenge:
Developing and implementing a reliable actuarial experience study capability was needed to provide a competitive advantage in the industry. Performing experience studies accurately and effectively would put the right information into hands of decision makers on a timely basis and provide a foundation for strategic analysis to respond to the market faster and proactively make smart business decisions. Experience study findings assist with setting liabilities, evaluating underwriting rules, assessing pricing assumptions, modifying marketing programs, considering new product development, analyzing premium and reserve rates, and reviewing evaluation assumptions.
The Solution:
The overall objective of this project was to understand the needs of the Actuarial Department staff who are involved with the experience study process and to develop detailed requirements for an automated capability to effectively perform the studies and report on findings.
The objectives of the effort were two-fold. First, DEA worked with the client to document the processes performed by the Actuarial department experience study personnel. Areas of opportunity recognized in the process documentation were analyzed and documented. System Architect, a repository based modeling tool, was utilized to store and evaluate the information.
Secondly, DEA developed requirements for the data necessary to perform experience studies. System, user interface and business rule requirements were also identified for gathering and reporting on the information. A process allowing user-defined queries against required data was developed to perform experience studies efficiently and effectively. Deliverables from the project included process maps annotated with opportunities for improvement, use case models and definitions, and data requirements.
