Business Challenge
Optimizing loss reserves to reduce credit risks
A financial protection and insurance products provider wanted to simplify its loss reserves setting process to ensure optimum reserves for various offerings and reduce credit risks.
Situation
Non synchronized data hindering reserve determination
The client offered a wide variety of insurance offerings including individual and corporate insurance, long-term care insurance, annuities, and banking products. The client’s insurance specific data was unorganized and non-synchronized, resulting in difficulties to determine and set loss reserves for its transactions. Client wanted a solution for simplification of loss reserve process based on all transactional data.
Loss reserve analytics, predictive modeling and forecasting
Get in touch with our experts to know more about advanced analytics.
Solution/Approach
We used loss reserve analysis and forecast to align all of the client’s historical transactions on a single platform, and evaluate the loss exposure. We analyzed the collated data to determine the reserve allocations and retention values for various products. We also used reserve analytics for loss predictions and to determine optimal pricing to minimize credit risks.
Impact
Better loan risk management with availability of loss reserve
The client utilized our single platform based loss reserve forecasting solution to ensure the availability of adequate reserves to absorb losses due to default. The client also improved its loss reserve amount auditing and implemented real-time monitoring, which helped ensure better lending decisions.