RelativMetrics
RelativMetrics™ is modeling that applies across all accounting categories within the Policy Year records of a carrier, essentially providing a summary picture for each policy year from recorded data through the ultimate expectation. Today carriers have ultimates for incurred losses; however, our modeling creates a complete picture of all accounting categories of each policy year to enable management to hold comprehensive expectations for the complete policy year. There is as much information about the expense ratio as there is about the loss ratio.
Better Data...
We are building an application that utilizes the historical attributes within the data by policy year. Using RelativeMetrics, the modeling brings the pacing and developmental patterns to the forefront, enabling analytics in the timeframe gap between recorded data for a policy year and the ultimate expectation calculation for that policy year. Importantly efficiency is created within the information that advances analysis.
The PaceMark™ results are interim expectations for future data calculated within RelativMetrics. The Ultimate Expectation projections from Actuarial analytics are not directly comparable from policy year to year as they span different timeframes. On the other hand, PaceMarks are directly comparable, a distinct feature of RelativMetrics enabling analytics. Additionally, PaceMarks are adjustable with actuarial techniques, thus presenting an improved methodology.
The first PaceMark is a direct expectation for the upcoming data in each accounting category. That is a budgeting benchmark for each accounting category and each policy year. RelativMetrics produces a Deviation Listing at ±3% to alert management when developments are not precisely as anticipated. RelativMetrics also produces Deviation Reports at ±5% in each category to provide summary analysis for such deviations. These reports provide management with a comprehensive overview of exactly where the arising data differs from expectations, enabling better insight into the dynamics occurring within each policy year.
Better Decisions.
RelativMetrics holds the capability of scenario testing to help estimate the impact of an ongoing catastrophic loss that is underway or to measure the impact of a new acquisition or divesture on the risk portfolio.
The PaceMark series or trendline sets the expectation for the complete development of each accounting category within a policy year at the point when new data is closed on the carrier’s books. It sets the basis for a novel and innovative alternative methodology for the actuaries to use in projecting ultimate expectations.
RelativeMetrics is an entirely new way to view policy year results. It fills a void in the data with credible, realistic interim expectations or pacing realizations that supply a comprehensive overview of policy year results, particularly of the loss developments that comprise the core concern for the industry.