Small Data: Large Liabilities – Modelling the Unmodellable?

A large UK domestic insurer came to us wanting our help in modelling some obscure and highly specialised latent claims liabilities to assist with their provision-setting in their audited accounts. This was a ground-breaking area of work, with no precedent for how the challenge was to be completed.

We performed an extensive literature review of the scientific and demographic information available and developed a modelling framework that helped us to prepare reserve estimates in a manner that could be readily understood by our client. Our straightforward approach to communicating uncertainties and innovative model design provided our client with insights of genuine value.