Seminar 217, Risk Management: Concrete examples of trend analyses and forward-looking modelling in Swiss Re's underwriting

Seminar | January 18 | 12:30-2 p.m. | 1011 Evans Hall

 Speaker: Matthias Weber, Swiss Re

 Center for Risk Management Research

- In insurance, underwriting performance is a function of exposures, losses relative to exposures and premiums relative to exposures. Getting losses and loss trends right (--> cost of goods sold) is critically important. A small estimation mistake typically has a large impact on the bottom line.
- Swiss Re is determining loss relevant trends using advanced analytics, often in collaboration with universities, government organizations, NGOs, rating agencies, consultants, investment management firms, lawyers, and others. Findings are used for both capital allocation and experience-based costing analyses.
- In situations where the past is a poor predictor of the future, exposure-based rating analyses using forward-looking models are superior to the traditional experience-based approach. Swiss Re's proprietary forward-looking models are routinely used in costing.
- The Swiss Re Institute professionalizes Swiss Re's R&D to improve its competitive advantage in risk selection and capital allocation in line with Swiss Re's strategic priorities.

 jschellenberg@berkeley.edu