Chartis' use of SAS analytics helps improve profitability, target new business

Johannesburg, South Africa  (11 Mar. 2011)  – Chartis, a world leading property-casualty and general insurance organisation, recently turned to analytics from SAS, the leader in business analytics software and services, to estimate the risk of future losses and help underwriters assess insurance risk. Chartis has also used SAS analytics to reconcile claim payments and estimate the need for bad-debt reserve funds related to premium receivables.

John Savage, Vice-President of Chartis' Strategic Risk Analysis Group, said: "Our use of 16 underwriting and finance predictive models has helped prevent millions of dollars of potential future losses on an insurance and reinsurance portfolio of approximately $13 billion."

Chartis' Strategic Risk Analysis Group, under the direction of Savage and Assistant Vice-President David Lee, has focused its use of SAS analytics on three specific areas: executive liability insurance, catastrophe modelling and financial accounting.

"In an 18-month period, we used a Web-based modelling tool available from SAS to target $14 million in new executive liability business, representing 100% growth in that segment. In addition, the modelling tool enabled us to avoid a potential loss of $75 million from certain executive liability accounts over the course of a year," said Lee.

The Strategic Risk Analysis Group also used the analytics to tackle the difficult task of catastrophe planning. When a calamity does strike, Chartis must quickly respond to the needs of affected clients. To ensure that funds are accurately accounted for in the company general ledger, the analytics team built an automated reconciliation tool using SAS. As a result, the group was able to reduce the amount of reserve funds needed to cover any discrepancies related to un-reconciled funds.

Finally, in a financial accounting project, the Strategic Risk Analysis Group used SAS analytics to build probability-based exposure models to estimate bad-debt reserve for uncollected premium receivables based on open balances across multiple lines of business. The methodology and algorithms comply with audit requirements and provide stable exposure estimates each quarter. "Modelling with SAS is highly scalable," said Savage.

Chartis

Chartis is a world leading property-casualty and general insurance organisation serving more than 45 million clients in over 160 countries and jurisdictions. With a 90-year history, one of the industry's most extensive ranges of products and services, deep claims expertise and excellent financial strength, Chartis enables its commercial and personal insurance clients alike to manage virtually any risk with confidence. Chartis is the marketing name for the worldwide property-casualty and general insurance operations of Chartis. For additional information, please visit our Web site at http://www.chartisinsurance.com. All products are written by insurance company subsidiaries or affiliates of Chartis. Coverage may not be available in all jurisdictions and is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain coverage may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.

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