Modeling To Cut Insurer Costs, Set Reserves Is Outlined

LAS VEGAS–While insurers rely on risk models to predict their loss exposure, models can also be used to establish reserves after the claim and examine the variables that can reduce the cost, two actuarial experts explained at a conference here.

Gary C. Wang and Laura A. Maxwell, consulting actuaries with Bloomington, Ill.-based Pinnacle Actuarial Resources Inc., discussed the formulas and loss trends actuaries can use to help predict the cost of a claim event at the opening workshop of the National Underwriter Company’s 11th annual ACE (America’s Claims Event) conference.