Big Wins From Big Data
Gen Re began collecting portfolio data from German life insurance companies around 20 years ago with a view to obtaining detailed insights into the market’s claims experience around mortality and disability products. For the insurers that contributed to the resulting data pools, which currently feature over 800,000 claims and over 250 million observed portfolio years, the analyses have turned out to be extremely useful.
The portfolio information from these life insurance companies consists of massive data records that originally served purely administrative purposes. The real potential of the data records could only be realized when we created so-called data pools, to develop opportunities for detailed analyses.
Around 25 German life insurance companies provide data on an annual basis for analysis of biometric risks in three separate pools: mortality, disability and annuity. The data pool participants are benefitting from the creation of this wealth of data in the form of better, more appropriate product pricing, for example, as well as complying with demanding regulatory requirements such as Solvency II.
Our clients find that this provides them with valuable knowledge of their portfolio composition and company-specific experience of mortality, disability and annuity products. This enables them to regularly assess and compare the assumptions they use in pricing and reserving. We then work together to evaluate this information and determine how it aligns with their strategy or if adjustments are necessary. In addition, their ability to source additional objective company-specific information eases some of their regulatory burden.
In a market environment that’s experiencing more competition and tougher regulatory demands, analyzing comprehensive portfolio data is making intensive data exchange work to everyone’s advantage.
Read our Topics publication for more on how German life companies are making use of portfolio data pools.