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  #51  
Old 01-24-2019, 08:29 AM
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Originally Posted by The_Polymath View Post
Also, just to add:

None of you have expertise with IFRS 17, so your views are quite simply not applicable to the work that I am doing on the modelling front.
If this is true, and you appear to know this up front, why ask in the first place?

And I don't think anyone here is arguing about the "complexity" of the modeling. However, understanding the underlying data and the qualitative influences upon that data *is* important, no matter how (un)sophisticated the model you are using. GIGO and all that.

So the "qualifications" many here are referring to isn't in regards to understanding the methods; it's about understanding the underlying data. And I can think of about 4 major differences between Life and non-Life products that would prove to be material when it comes to applying any sort of models to the two data sets.
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  #52  
Old 01-24-2019, 08:55 AM
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Originally Posted by ShundayBloodyShunday View Post
If this is true, and you appear to know this up front, why ask in the first place?

And I don't think anyone here is arguing about the "complexity" of the modeling. However, understanding the underlying data and the qualitative influences upon that data *is* important, no matter how (un)sophisticated the model you are using. GIGO and all that.

So the "qualifications" many here are referring to isn't in regards to understanding the methods; it's about understanding the underlying data. And I can think of about 4 major differences between Life and non-Life products that would prove to be material when it comes to applying any sort of models to the two data sets.
If you check the first post of this thread you will find that I was not asking for technical advice. It was a general question on the use of excel for reserving purposes.

Arlie then asked a few questions, so I answered them and we then went down an IFRS 17 tangent. At no time did I ask for any kind of technical advice because I do not need it. I simply mentioned I have read a few technical docs from the CAS (I am amused when people assumed they were on basic reserving. They where not) and I gave a very brief summary of some international differences vis-a-vis the spectrum relating to the sophistication of the techniques used in P&C reserving.

Cue the entry in the thread of the uber entitled P&C brigade after that.
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  #53  
Old 01-24-2019, 09:40 AM
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As someone who started out his career doing reserves reviews at a DOI, and then did my time for two years in reserving at an insurance company, I have a biased perspective.

I don't think reserving methods are too hard to learn or implement (although I have seen many actuaries make ridiculous errors in Excel with material impacts - at the DOI stuff like this was especially concerning).

I don't think you lack the understanding of what is appropriate. With that said I personally wouldn't be comfortable booking reserves for an entire company based on my few years of experience.

There are just so many outstanding questions to ask:
1) Has there been case strengthening or payment speedups?
2) Has there been a change of guard of case handlers? I know that I have seen methodology and case reserving changes more often than I would have expected.
3) Is the data actually accurate?
4) Can you get report year data for financial lines?
5) Is ceded data being calculated correctly? Is it even available?
6) How have you decided to group together buckets? I remember attending a Clark seminar where he showed how one triangle looked like it had one clear development patterns, but actually splitting it apart it was two triangles with two different development patterns. This makes a big difference when you have change of mix going on. Perhaps one of the hardest things is deciding how to aggregate the data.
7) Have the closure rates/severity/frequency been consistent over time?
8) Have exposure changes or limits changes effected the triangles?
9) Are they actually reporting the transactions regarding the claims correctly? I have seen cases where open claims were closed and closed were open. This was a huge mess because the actuary was using frequency and severity techniques.

The list goes on an on. At least to me, the above makes me concerned of how to reserve.
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  #54  
Old 01-24-2019, 09:47 AM
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Ok, actually rereading this thread I think we did all pile on our favorite FSA a little too harshly. Force of habit I guess.

Nowhere did he say that he would be opining on the adequacy of the booked reserves, only that he was tasked with moving the reserving process to a more modern system. As long as he's working with the actuaries who understand the underlying business to get them the data they need in a way they can understand, there's no reason to suspect (in general) that he's not qualified to do that.
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Old 01-24-2019, 11:09 AM
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I agree with therealsylvos. My apologies to PM.
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  #56  
Old 01-24-2019, 12:14 PM
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The complexity of the job is usually the data part. For a typical reserve review for a new client, maybe 80% of the effort is dedicated to getting the data to a spot where you can actually analyze it. The rest of the work is fairly straightforward for a lot of lines of business, though obviously, things can get complicated depending on the exposure (e.g., setting reserve levels for policies attaching at high excess layers). An SOA actuary with a little bit of spare time can definitely figure out the mechanics of the BF method. They can also understand the qualitative factors for why you might want to make adjustments in selections, methods, etc.. A random person off the street probably couldnít, but I think the OP is saying this stuff is simple for people that already have some experience in financial modeling, not for the general public.

Excel is common because, well, Excel is common. The other platforms have advantages that are more relevant for some lines than others, but they also have one huge disadvantage: a much smaller user base. This means larger learning curves, more difficulty fixing issues, more difficulty presenting results to stakeholders unfamiliar with the software, higher software licensing costs, etc. Virtually every single person in the business world knows at least a little Excel. The other platforms (there are dozens of them) arenít anywhere near as popular, which poses very real operational disadvantages. Moving out of Excel is only worth it if the advantages outweigh the disadvantages. A lot of the time, they donít. Excel is the reliable sedan you use to drive 30 minutes to work. The other platforms are the helicopter that would allow you to do the same trip in 10 minutes. In some contexts, the helicopter makes sense, but not all the time.

But yeah, this whole thread is /r/iamverysmart material. The OP came in here blasting P&C actuaries for doing simple math in crayon, and walks out surprised that people get a little defensive.
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  #57  
Old 01-24-2019, 01:15 PM
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Oh, yeah, if you are just doing some data architecture, and the people who are qualified in P&C still have control over how to vet and group the data, and how to use it, I'm sure you are qualified. Sorry to imply otherwise.
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  #58  
Old 01-24-2019, 04:06 PM
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yeah, he'd be okay to do the grunt work of setting up the basics and then letting people who know something about the business do the actual analysis and draw appropriate conclusions
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  #59  
Old 01-24-2019, 04:20 PM
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Well, if yoyo can do reserve reviews then pretty much anybody else can do it.

Thats how I view it.
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  #60  
Old 01-24-2019, 04:37 PM
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Originally Posted by The_Polymath View Post
Well, if yoyo can do reserve reviews then pretty much anybody else can do it.

Thats how I view it.
Uh, do you know anything at all about yoyo, other than his user-name, that he carries a CAS badge, and that he has a 15 year pin?
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