Risk Relationship Resource Model Automation
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Solution Overview
Problem
Existing systems for determining reinsurance premiums are time-consuming and error-prone, requiring frequent manual input and lacking in automation and ease of access to updated models.
Innovation Solution
A computerized system that retrieves and updates risk relationship resource models using a data store, executes experience and exposure rating processes, and facilitates interactive actuarial interfaces to generate and display prospective resource amounts, allowing for automatic adjustments and improved data exchange.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If manual spreadsheet applications are used for pricing models, then flexibility in model adjustment is maintained, but time consumption and error rates increase significantly
Solution Approach 1:
The system enables self-service through automated data retrieval from the data store, automatic execution of experience and exposure rating processes, and automated model updates. The computer server autonomously performs pricing calculations and generates results without requiring manual spreadsheet manipulation, thereby increasing productivity while maintaining operational flexibility through the interactive user interface.
2Measurement precision
If frequent model updates are performed manually, then accuracy of reinsurance premiums is improved, but time consumption and operational complexity increase
Solution Approach 1:
The system performs preliminary actions by pre-storing risk relationship resource models, experience rating parameters, and exposure rating data in the data store. When updates are needed, the computer server automatically retrieves these pre-prepared data elements and executes the rating processes without requiring manual data collection or preparation, thereby maintaining high accuracy while reducing update time.
3Productivity
If automated computer systems are implemented for pricing models, then processing speed and accuracy are improved, but system complexity increases
Solution Approach 1:
The computer server acts as an intermediary between the user interface and the data store, managing the complexity of automated pricing calculations. It retrieves data from the data store, executes experience and exposure rating processes, and returns results to the user interface. This intermediary role encapsulates the computational complexity while presenting a simple, user-friendly interface, thereby achieving high productivity without overwhelming system complexity.
4Ease of operation
If interactive actuarial interfaces are provided for user input and output, then ease of operation is improved, but data exchange complexity and network requirements increase
Solution Approach 1:
The computer server provides multi-functionality by handling multiple tasks through a single unified system: it manages the interactive user interface, retrieves and stores data in the data store, executes experience rating and exposure rating processes, and generates pricing results. This universal approach consolidates multiple functions into one system, improving ease of operation while managing data communication requirements efficiently through centralized processing.
Data Source
AI summary
A risk relationship resource model data store contains electronic records for risk relationship resource models. Each electronic record includes an electronic record identifier, model version identifier, period definition, and layer information. A computer server retrieves, from the data store, information about a risk relationship resource model including the model version identifier, period definition, and layer information. The computer server may then receive, from a remote user device, an adjustment to the risk relationship resource model and execute the model, including an experience rating process and an exposure rating process, to generate a prospective resource amount (based in part on the period definition and the layer information). Information about the adjusted risk relationship resource model, including an updated model version identifier, may then be stored into the data store. The remote user device may support interactive actuarial interface displays that collect, calculate, and provide information (including the prospective resource amount).