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The power of three in insurance reserving transformation

June 13, 2023

The fourth of our five-part article series on reserving transformation.
Insurance Consulting and Technology
Insurer Solutions|InsurTech

Part 4: The power of three in insurance reserving transformation

Like the chimera of Greek mythology, effective reserving transformation is a combination of three things – technology, processes and, sometimes forgotten but equally important, people.

So far in this article series, we have talked about characteristics of best practice reserving and some of the technology and process issues you are likely to need to address in moving towards your own version of it.

But complementing technology and process, there’s one additional and essential component in what, rather than a chimera or anything else beast-like, we would rather describe as a ‘holy trinity’ of reserving transformation – people.

In short, if you don’t take your people with you and align the working culture around your technological and process upgrades, you may be trying to push water uphill. That doesn’t just apply to reserving of course; it’s paramount in any change programme.

All the pieces of the jigsaw

So, let’s put the three pieces of the jigsaw together and assemble a general picture of how you might turn the tide in the favour of your reserving function.

Image showing the connection between technology, processes and people
The power of three


Starting from the top segment of our diagram, you’re going to want your technology to be appropriately future proofed and scalable so that you can adjust to changing business and regulatory needs over a reasonable timeframe. A system that effectively allows you to ‘plug and play’ the best tools for a specific function will give that agility and flexibility.

You’re also going to need a plan for how you’re going to maintain and make iterative updates to the platform and/or data feeds and sources of calculations. Will your own people be able to do that, or are you going to need to bring in external support?

And that kind of question is wrapped up in the bigger issue of making sure you’ve factored in all ‘hidden’ costs. Other examples that might fall into that category would including IT hardware requirements, resources to maintain the software and other IT costs that don’t just come under the purchase of a new software.


When talking about ‘fix and shift’ and ‘shift and fix’ approaches to combining technology and processes in a transformation plan in our previous article in the series, we hopefully communicated the importance of having a roadmap with identified success criteria in mind so that you don’t take process changes down a potentially blind (and costly) alley.

That said, you have to start somewhere and the logical place is to focus first on areas that offer the biggest value add, the ‘quick wins’, accepting and embracing the occasional failure or wrong turning along the way. Crucially, the earlier you start, the less painful it is likely to be as you don’t really want your process to be near breaking point while trying to implement change. That doesn’t mean necessarily avoiding painful choices altogether as the easy path may not always be the best path.


If, as we said above, an imperative is to take your people (certainly your reserving team) with you, what is that likely to require?

First and foremost, it’s going to need a clear vision from leadership, spelling out the business and practical cases for change to help achieve a target operating model and, perhaps even more importantly, answer the “what’s in it for you” questions.

Essential as that clarity of understanding is, real change is unlikely to occur without meaningfully engaging with the most affected people to win over hearts and minds, so that they don’t slip back into old ways or workarounds. Communication, proper training and appropriate support in the transition phase will all need to form part of the goal of embedding a culture of change.

Coming up: In the final article of the series, we pull everything together in a client case study of successful reserving transformation in progress.


Dan Joseph
Director, Insurance Consulting and Technology
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Holly Layton
UKI Reserving Transformation Lead
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Sam Bright
UKI Reserving Innovation Lead
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