Cognalysis Reserving System™

Average Isn’t Good Enough

Cognalysis Reserving System™ contains standard actuarial techniques for estimating reserve levels, as well as statistical techniques to provide guidance for various selections.

The following samples represent only a fraction of the software’s total functionality. Contact Chris Gross at 651-293-8008 to learn more.

Improved Comparison of Competing Indications

How much weight should be given to competing reserve indications? The Cognalysis Reserving System™ approaches this problem from a fresh viewpoint. It considers the stability of each reserve indication – as well as correlation between the different indications. From this valuable information, our software provides suggested weights that are intended to increase the stability of the combined estimate. The information gained from this approach can provide new insights to an old problem.

Efficient Process and High Impact Output

The robust automation and unique graphical environment make it easy to quickly review a number of related analyses to see how previous projections have performed, where selections are changing, how such changes impact calendar year results, and where attention needs to be focused.

Integrated Reserve Ranges

How closely related are your reserve range calculations to the way in which you actually select reserves? With our software, they are an integral part of the process, reflecting uncertainty around selected development parameters and selected reserve estimates, as well as the reduction to uncertainty from using multiple indications. The Cognalysis Reserving System™ also reflects a very important component that is often missed – correlation of errors – including those between development periods, accident periods, and lines of business.

Internally Consistent Projections

The Cognalysis Reserving System™ effortlessly uses your development pattern, seed loss ratio, and reserve selections to project interim paid and incurred loss amounts that are consistent with each other and converge to your selected reserve estimate. If there are discrepancies between methods, they are blended in a thoughtful, stable manner which results in a reasonable, internally consistent projects. These projections are compared graphically to actual losses in subsequent analyses to give greater insight into loss development, as well as provide internally consistent cash flow projections for asset liability management and discount calculations.

Graphical View of Risk Attribution

Understanding variability is critical to discussing reserve estimates, describing the risk profile of the company, and deciding where to focus analytical effort. By providing new, powerful graphic displays, such as RiskCircle™, the Stand-alone risk of individual lines can be understood in term of their impact to the overall risk picture. This information can then be used as a starting point for capital allocation and other enterprise risk management problems.

Parameter Selection Assistance

Loss development factors and underlying loss ratios change over time. The failure of the actuary to respond nimbly to a changing environment can result in bad strategic business decisions. On the other hand, responding too quickly to random noise can also lead to distortions and bad decision making. Being able to make sound, informed judgements about whether differences over time are due to random fluctuation or a true change in the environment can be extremely valuable. The Cognalysis Reserving System™ provides specialized statistical tools to assist the actuary in making such judgments.