Speakers: Shu Yi Lim, Nicholas Chee Lek Yeo
Actuaries calculate ultimate loss by employing various standard actuarial techniques combined with expert judgment. These calculations are often manual and time-consuming. Judgments are biased. To ensure the actuarial reserves are reliably calculated and completed in a timely manner is often a challenge.
The IBNR Robot is an artificial intelligence driven process automation tool. Ultimate loss calculations can be completed in seconds. Actuaries can spend more time on value-adding analysis rather than turning the loss reserving process wheel.
The IBNR Robot combines statistical optimization techniques such as jack-knife, runs tests, t-tests for correlation, fuzzy logic, method of Lagrange multiplier and the method of moments with commonly used loss reserving methods such as the linked ratio method and Bornhuetter-Ferguson method to arrive at parameters such as age-to-age factors including tail factors, seed loss ratios, resultant optimal IBNR methodology and individual business class as well as company aggregate IBNR estimates and its range.
The IBNR Robot has proven to be reliable when used in practice for actuarial pricing and reserving tasks.