Guy Carpenter releases latest version of reserve risk modeling tool

Guy Carpenter and Co. has released the latest version of its  reserve risk modeling tool MetaRisk Reserve 3.0.

The updated tool includes “improved Solvency II reporting,” according to Guy Carpenter, a member of the Marsh & McLennan Companies.

MetaRisk Reserve has also now been integrated with MetaRisk 7.2, the firm’s risk and capital management decision-making tool, to produce reserve event files, the company’s announcement said.

“Awarded a U.S. patent earlier this year for its unique system for determining loss reserves, MetaRisk Reserve 3.0 enables clients to capture historical economic trends, such as inflation, in order to get a better understanding of how those trends can affect the loss reserves of their companies,” according to Guy Carpenter.

“MetaRisk Reserve 3.0 can be integrated into a spreadsheet so that analysis can be performed with any data,” it also said.

The firm also argues that most reserving models can’t capture inflationary trends, and thus ignores that risk, while its own tool measures those trends in insurers’ loss triangles.

The updated tool “also provides insurers the ability to more precisely assess the impact of reserve deterioration on profits and capital, and become more compliant with rating agency and upcoming ORSA (Own Risk and Solvency Assessment) requirements,” Guy Carpenter said.

“The predictive modeling capabilities of MetaRisk 3.0 enables companies to quantify reserve risk and consequently, allocate capital more effectively, refine reinsurance strategies and improve enterprise risk management.”