USP Tool

The USP tool provides all the necessary calculations and graphics for applying a company-specific parameter. Additionally, a variety of actuarial methods are available that, in particular, support the actuarial function.

Functionalities of the program:
  • Calculation of the Premium and Reserve Risk Method 1
  • Calculation of the Reserve Risk Method 2
  • Inspection of the data requirements for the Premium and Reserve Risk Method 1 as well as for the Reserve Risk Method 2
  • Sensitivity analyses
  • Tail analyses
  • Bootstrapping
  • Backtesting the Chain Ladder Reserve

For calculation of a company-specific parameter using Method 1, economic run-off ratios are first required. The program can calculate these independently and very flexibly from a given run-off triangle.
The economic run-off ratios are used to minimize the log-likelihood function described in the delegated regulation. The minimization is carried out with three numerical methods and the best result is used. Variation and optimization of the starting values for minimization is also possible.

The calculation within USP for Method 2 is based on the model of Merz & Wüthrich. The USP tool calculates errors for each accident year as well as the total error. A given run-off triangle serves as the basis. The calculation options can be used to guide which run-off triangle (for example, gross, net, with and without claims settlement expenses, etc.) should serve as the basis.

ROKOCO supports its customer in all questions relating to company-specific parameters, ranging from reviewing the profitability of an approval process to all necessary tasks required for approval by the local supervisory authority.