Seattle-based Milliman, an international consulting and actuarial firm, has launched P&C Reserve Variability Model Version 1.4, the newest version of its casualty insurance reserve variability modeling software. According to a press release, the new version adds usability features to the statistical enhancements includes in previous releases of the solution in an effort to make the most sophisticated stochastic models more accessible.
The Reserve Variability Model is used by casualty insurers to obtain better information about unpaid claim estimates. The software expands on industry standard bootstrap simulation techniques, Milliman says, allowing actuaries and analysts to model the variability in unpaid claim estimates as well as understand and demonstrate the risks inherent in those estimates. The vendor suggests that the model's stochastic techniques provide more realistic variability estimates than those that are available from traditional spreadsheet approaches.
The latest release features enhancements such as reconciliation between stochastic approaches and deterministic estimates from the same historical data; the ability to "shift" a resulting distribution so its mean matches the user's deterministic value; the ability for the model to reflect events that may not exist in historical data but are still possible outcomes; and tools to help users select key parameters to better fit the models to their data.