Required for each account closure at a minimum, reserving is a regulatory obligation that involves a significant workload for an insurance company.
This process requires particular attention in terms of both actuarial and process automation considerations.
This process requires particular attention in terms of both actuarial and process automation considerations.
In this article, we will explain why it is important to transform your reserving process and the challenges this represents for you. We will also show you how you can optimize your reserving process and how a software solution can be the answer.
Common challenges in the reserving process
The reserving process faces many challenges: managing operational complexity, traceability and justification of choices, compliance with regulatory standards, data quality, adaptability, etc.
Let’s now try to understand these different challenges a little better.
Managing operational complexity
Reserving must be carried out within short time frames, despite the significant volume of actions to be performed and validated. This complexity is accentuated by the fact that few players have teams entirely dedicated to reserving and that many steps are still manual, increasing the risk of operational errors.
Traceability and justification of choices
The process is subject to regular reviews, particularly by auditors or supervisors. It is therefore essential to be able to document and justify the decisions taken, both in terms of the data used and the actuarial assumptions and methods employed.
Compliance with regulatory standards
Reserving must comply with current requirements, whether national, European (Solvency II) or international (IFRS 17).
Data quality
The reliability of results depends on the quality of the data used. Despite the large volume of data, it is essential to ensure its integrity, consistency and relevance.
Adaptability
The reserving process can be difficult to adjust, whether to correct a method, incorporate market changes or anticipate new risks. A certain degree of flexibility is therefore necessary to remain relevant in a constantly changing environment.
Key steps to transform your reserving process
With the many challenges you face, it is essential to be able to transform your reserving process in order to optimize processing time, guarantee data quality and traceability, comply with regulatory standards, and more.
To achieve this, there are several steps you can take to transform your reserving process.
Complete process automation
In order to transform your reserving process, it is best to manage it in a single automated work environment, from database storage to the production of actuarial reports. This streamlines data transfers, significantly reduces the risk of operational errors, and ensures better control of the process, thereby enhancing the reliability of results.
Audit, validation and traceability
In order to ensure robust traceability and increased transparency, it is important to be able to audit your reserving process and to receive validation steps throughout. This makes it easier to justify the results to auditors or supervisors meeting compliance and internal control requirements.
Compliance with regulatory requirements
As mentioned above, reserving must comply with regulatory requirements such as IFRS 17 and Solvency II. It is therefore essential to take this into account when transforming your process. The aim is to enable you to always remain compliant, regardless of possible regulatory changes, thus ensuring complete coverage of non-life insurance needs.
Why choose a software solution for reserving?
With the aim of transforming and optimizing your reserving process, a software solution can provide you with a real answer:
- Reliability of the process, which is fully automated
- Time savings at each closing
- Increased reliability of data, processes, reporting, etc., guaranteeing you improved quality
- Centralisation of data and results
- Guaranteed reports and justifications to be provided to auditors or supervisory authorities
- Improved ability to adapt to market changes with continuous updates to the solution to meet new expectations and regulatory developments
Collaborative, secure SaaS architecture
The SaaS architecture of a software solution simplifies access to actuarial work, while ensuring optimal centralization and security of data. The environment is therefore collaborative, accessible, secure and adapted to production and review challenges.
Artificial intelligence, machine learning… for predictive analytics
Today, it is important to leverage new technologies such as artificial intelligence and machine learning to benefit from advanced capabilities in visualization, dynamic reporting and predictive analytics. This enriches analysis, optimizes decision-making and improves operational efficiency.
Shaping the future of Reserving, thanks to Addactis Platform
Simplify and optimize your reserving process and make more informed decisions with our Reserving solution, integrated into Addactis Platform.
Discover now how our Reserving business application can meet your needs and transform your reserving process.
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