Stochastic methods have been well integrated into the Life insurance segment of the industry. From my naive perspective HEalth and to a lesser degree P&C have been unable to benefit from these methods due to a lack of commercial software that exploits stochastic probability model.
I received an email from MArk Zanecki of IHA consutants describing a new software package that supports the introduction of Stochastic methods for Health and P&C. Mark takes advantage of Windows Compute Cluster Server to easily extend the required computation to multiple computers, significantly shortening the time to solution and meaningful answers.
Marks email is Quoted below
The aim of all insurers is to enhance the flow of information within their walls to be faster, more accurate, and through software/hardware at overalllower cost. Looking into the future, an insurer (health or property&casualty) requires actionalble information to be incorporated into pricing (notably trend), underwriting and forecasting for internal and external audiences. Looking at the past, the insurer requires accurate financial reporting, mostly notably with respect to reserve estimation for a variety of audiences including regualtors, tax authorities and financial rating such as AM Best, Moody’s, S&P and Fitch etc.
IHA Stochastic Toolset for actuaries, built on HPC, fulfills this mission and frees the actuary to analyze results rather than developing the results. The aim ot the tool set is better quantification of risk to include measures or risk variability as required by actuarial profession bodies in US, EU, Canada and Australia. Moreover the actuarial value addivity to an insurer’s internal flow is significantly enhanced as view from Chief Financial Officer as results are available in compressed time built on a auditable/reproducable process.