Milliman's Reserve Variability Model™ offers some of the most sophisticated reserving models available, presented in a format that's easy to understand and use. These informative reserve estimates allow insurance companies to move forward with increased confidence as they allocate capital between company divisions, negotiate reinsurance agreements, and evaluate possible acquisitions.

Many insurance companies are struggling to create their own stochastic reserve models, but find it difficult with their existing systems to achieve the necessary speed and computing power. Our modeling solution offers a faster and more affordable alternative to in-house system development.

Stochastic model provides valuable new information

Traditional deterministic point estimates don't provide the depth of information needed for today's more complex insurance landscape. To address this challenge, our Reserve Variability Model uses time-tested stochastic bootstrap models that have been substantially enhanced, allowing it to adjust to fit the unique characteristics of each company's data. A number of different models are provided, supporting estimates to ultimate and estimates based on a one-year time horizon.

The bootstrap method uses hundreds of thousands of simulated outcomes to form a complete picture of the risk inherent in a company's portfolio or block of business. This gives the company more detailed information about the potential risk in its business, helping users understand and explain the reasoning behind the numbers, rather than merely offering statistics.

Expert training and support

Introduced in early 2007, the Reserve Variability Model is used by Milliman experts to provide reserve estimates for some of the industry's largest insurers. We have recently started licensing this tool to insurers and reinsurers as well, backed by our comprehensive training and technical support. The same team of actuarial and engineering experts who created our Reserve Variability Model continue to oversee its refinement and provide support to licensed users.

For companies who license the model to operate in-house, we provide a full day of training, using their data at their facilities. Following training, we provide prompt, responsive telephone and online support throughout the lease term.