How to answer this Technical interview question about Reserve Adequacy for Senior-Level Actuarial and Valuation Analyst?

What methods do you use to assess the adequacy of reserves for a global reinsurer?

Actuarial and Valuation Analyst

Technical

Asked at

Swiss Re

Difficulty :

Hard

Explanation

This question assesses your ability to evaluate whether reserves are sufficient to cover future claims, particularly in a reinsurance context where risks are pooled globally. Recruiters are looking for candidates who can analyze reserve adequacy using statistical and actuarial techniques like loss development triangles and stress testing. Avoid failing to address the importance of regulatory compliance and market conditions.

Answer Example

I assess reserve adequacy by using loss development triangles to analyze historical claims trends and predict future liabilities. Additionally, I perform stress testing to assess the impact of extreme events on reserve sufficiency. For instance, while evaluating reserves for a catastrophe reinsurance portfolio, I identified under-reserving risks by analyzing tail scenarios and proposed an increase in reserves by 15% to meet solvency requirements. This ensures the reinsurer remains financially stable under adverse conditions.

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