Study links insurance cycle to reserving policy

Insurers use well-tested actuarial approaches to calculate reserves but there will always be a need for adjustments

Insurers could substantially improve their reserving practices by paying more attention to the effects of the insurance cycle, suggests a study appearing in the latest issue of Swiss Re’s Sigma publication. The report adds that insurers’ reserves strategy would also be improved by paying more attention to trends such as increasing wages, increasing health costs, and longer life expectancy.