02 — Capability · BC-1740.60
Actuarial Valuation & Reserving
Know what the insurer's policies and claims will cost in the end and hold reserves that are adequate and measured on each required basis, by estimating loss and policy reserves, setting assumptions from evidence and measuring insurance contracts for reporting. Case reserves on single claims sit in Insurance Claims, and solvency capital sits in prudential risk.
- Actuarial Reserving
- Reserve Valuation
- Valuation Actuarial
In scope
- Loss reserves for P&C, including IBNR and ULAE
- Policy reserves for life and annuity contracts
- Assumption setting and experience studies
- Insurance contract measurement on accounting and statutory bases
Out of scope
- Case reserves on individual claims (see BC-1750.20.30)
- Solvency capital and solvency-basis technical provisions (see BC-1780.30)
- Closing the books and publishing financial statements (see BC-210)
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Decomposes into · 5
- BC-1740.60.10Loss Reserve EstimationProject ultimate losses by line and accident year from paid and incurred development, and set the IBNR and loss adjustment expense reserves the book needs on top of case reserves.
- BC-1740.60.20Life & Annuity Reserve ValuationValue the reserves for in-force life and annuity contracts from projected benefits, premiums and expenses, policy by policy or by model point.
- BC-1740.60.30Actuarial Assumption SettingSet and approve the mortality, morbidity, lapse, expense, discount rate and claims development assumptions that reserves and pricing use, with the evidence for each change recorded.
- BC-1740.60.40Experience StudiesCompare actual mortality, lapse, claims and expense experience with what was assumed, so assumptions and pricing can be corrected before the gap grows.
- BC-1740.60.50Insurance Contract MeasurementMeasure insurance liabilities and the profit they release over time on each reporting basis the insurer must follow, such as IFRS 17, LDTI or local statutory rules.