Lloyds' managing agent transforms reserving process resulting in a market-leading solution

A Lloyd's managing agent and one of the world’s leading providers of reinsurance and specialty insurance was looking to create a more efficient and future-proof reserving environment that would integrate all the core systems in their existing reserving process. They wanted to transform their reserving process and embed this within an automated solution that enables initial results to be produced within 24 hours of quarter end.

Their detailed objectives were:

• Timeliness – First cut results available within 1 day of quarter end, with automatic validation checks ready for sign-off and Analysis of Change (AoC), Actual versus Expected (AvE) and results summaries available for review
• Agility – AoC and AvE published in Tableau by Reserving to executive management team including the Chief Actuary to immediately inform decision making and identify areas requiring further investigation
• Insight – Ability to drill through to individual claims driving AvE to identify claim trends and underperforming segments of the book
• More accurate reserving – Through early sight of trends and increased time for deep dive analysis and assumption selections
• More focused reserving – Automatic identification of segments where prior ultimates can be retained and segments that require expert review
• Governance and Control – A comprehensive, controlled reserving environment from data to results with dashboard reports allowing progress to be monitored
• Continuous improvement – Internal team self-sufficient in the tools, allowing them to incrementally improve the system and processes on an ongoing basis

WTW and the managing agent worked collaboratively to understand the challenges and to design a solution that would achieve the future state objectives. The solution was delivered on the client’s own systems and automated the client’s own tools: from raw data stores and SQL databases to ResQ and ultimately to management reporting. WTW provided support, training and guidance on how to use ResQ and Unify in combination to develop a market leading reserving function. The managing agent team retained ownership of the result and built the environment with review from WTW.

Unify orchestrated the transmission of data among key applications and controlled and governed user interactions - notifying individuals at key steps along the way and requesting and documenting reviews and signoffs. The Unify platform enables these same capabilities to be applied to any process that interacts with the reserving function and is also applicable to wider enterprise activities.

• More information delivered earlier with better insight into selections and drivers of results
• Better communication of analysis status and information around which reserves are changing and why
• More control, improved oversight of entire process and better documentation
• Less human interaction, fewer errors and shorter timeframes

Following this collaborative approach, the managing agent is now completely self-sufficient, and has embarked on full implementation of the solution in production with WTW providing support when requested. This enabled a cost-effective deployment for the managing agent while still ensuring that the system design and build was aligned with best practices identified by WTW.

The client also valued the guidance we offered with their broader transformation objectives, moving away from a complex process with significant amounts of end-user tooling in Excel that introduced opportunities for manual errors. That was replaced by a robust, efficient and well-governed solution comprised of SQL, ResQ and Tableau integrated, automated and controlled by Unify. We further introduced a rules-based reserving approach with an algorithm that would decide where prior selections could be maintained, where to make new selections and which segments should be escalated for human review – all completed in time for the first day after quarter close. With minimal human effort and elapsed time, this process produces the first cut of the client’s reserves, which previously took a full week to perform manually – an 80% reduction in time, effort and resources.

Furthermore, we were able to demonstrate our technical experience, process excellence and client focus to generate trust in our solution and services.