Reserving & IFRS 17: The liability nobody can look up, estimated from the claims history

Paid and incurred development triangles built from dated claim history, chain-ladder factors you can overrule, ultimate and IBNR by origin period, and IFRS 17 under the premium allocation approach per group of contracts, with a risk adjustment and appointed-actuary sign-off — inside Insurance Management.

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Reserving & IFRS 17 in the Insurance Suites: The liability nobody can look up, estimated from the claims history

What the claims already incurred will finally cost

Claims are grouped by the year or quarter the loss happened and valued at the end of every later period, from dated payments and dated reserve movements. Anything paid or reserved after the valuation date is left out, so the triangle is rebuilt from history rather than arranged from today's balances, and an old study can be reproduced. Between two development periods an age-to-age factor is worked out three ways — volume-weighted, simple average and the last N origins — and the selected factor is editable, because a study nobody can overrule is a study nobody will sign. The factors chain to an ultimate for each origin, and IBNR is the ultimate less what is already known.

IBNR by origin year

Known to date, the development factor, projected ultimate, IBNR, paid to date and case reserve for each origin year, with the whole answer written out in one sentence above it.

Measured per group of contracts, and it has to add up

IFRS 17 measures groups of contracts, not a company: one portfolio, one annual cohort, one profitability bucket assessed when the contract is first recognised, and a contract never moves once it has joined a group. For each group the measurement rolls the liability for remaining coverage through premiums, acquisition cash flows deferred and amortised, insurance revenue and any loss component, and the liability for incurred claims through claims paid, case reserves, the reserving study's IBNR shared out on each group's incurred cost, and a risk adjustment. Every measurement states whether its movements explain the closing balance, and one that does not cannot be signed.

Groups of contracts

Portfolio, annual cohort and profitability for every group, with the measurement model and the risk adjustment it carries.

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Everything in Reserving & IFRS 17

19 items in 7 areas, every one shipping with the app today.

Reporting
- Today, yesterday, this week — on every listReserving studies filter by their valuation date and IFRS 17 runs by the end of the period they value, over the same eight periods as the rest of the suite.
Triangle
- Built from historyPayments and reserve movements dated on or before the valuation date, so an old study reproduces.
- Paid or incurredPaid only, or paid plus case reserves — run both and compare them.
- Years or quartersOrigin and development by year or by quarter.
- Classes of businessThe whole account, or only the classes you choose, so motor and liability are not mixed.
Ladder
- Three factor methodsVolume-weighted, simple average and the last N origins.
- Editable selectionOverrule a factor and re-project; the triangle is kept and only the projection is redone.
- Tail factorDevelopment beyond the oldest column the data can see.
Result
- Ultimate and IBNRBy origin period, with known to date, paid to date and case reserve.
- Said in one sentenceKnown, ultimate, IBNR and case reserves written out on every study.
IFRS 17
- Groups of contractsPortfolio, annual cohort and profitability bucket; a contract never moves group.
- LRC roll-forwardPremiums, acquisition cash flows deferred and amortised, revenue and loss component.
- LIC roll-forwardClaims paid, case reserves, IBNR and the risk adjustment.
- Risk adjustmentA percentage set on the portfolio, applied to case reserves plus IBNR.
- Same-basis openingThe opening liability can carry the previous study's IBNR, so a movement is not a change of definition.
- Explains itselfOpening plus movements against closing for every group, with the gap shown.
- Insurance service resultRevenue less claims incurred and acquisition cash flows amortised, per group.
Control
- Signed and frozenAppointed-actuary sign-off, and no recomputation once signed.
Reports
- Pivot and ExcelThe triangle cells as a pivot, origins down and development across, with Excel download.

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What Reserving & IFRS 17 works with

Reserving & IFRS 17 shares one database with the rest of the Insurance Suites and BridgeERP: these are the apps it already talks to, with nothing to buy in between.