P&C Insurance Earnings/Incurred Methods

[LouisPerez]

Does anybody have any suggestion regarding the data requirements to fulfill Calendar Year, Accident Year and Policy Year basis of evaluating Earned Premium and Incurred Losses? While I realize that the source data for all 3 methods is identical, the methods produce 3 distinctly different results. Does this mean that I have to set up 3 different Data Marts?

 

[monsky]

Can you elaborate on this?

 

[johnherman]

I assume you have 3 date attributes in the fact table associated with Calendar, Accident and Policy years. If not, that should be your objective. It is worthwhile to determine these time variables in advance and not on the fly at query time. So, at the Claim Line (most detailed) level, create/populate three date/time attributes. If the day of the month is not important, you can certainly have something like PolicyYYYYMM.

Then, there are two options. One, have a Calendar table as your time dimension. In the calendar, you can take care of things like fiscal year and month, weeks assigned to quarters, monthly close and process dates, etc. The second option is to simply define three time dimensions, one for each of the three dates (Cal, Acc, Pol) in the fact table.

-------------------------
The trouble with doing something right the first time is that noboby appreciates how difficult it was.
- Steven Wright

 

[tdimarco]

Another approach, one we have used frequently, is to maintain a dimension for the "Period Type" (i.e. Policy Year vs. Accident Year vs. Calendar Year). This allows you to have a single time dimension with the ability to select any time perspective or see the time perspectives side by side. We deliver internet based reporting services to P&C insurance carriers as an ASP and they really like the flexibility of this design. Hope this helps!