Case Study: Streamlining Cancellation and Claim Frequency and Severity Curve Construction
The Challenge
Our client, an investment bank, often constructs cancellation and claims frequency and severity curves for their clients’ financial products. These curves are critical for predicting future cancellations, claim timing, and severity. However, the process is labor-intensive, requiring significant time and manual effort to build each curve from raw data. Updates are even more cumbersome, as curves have to be rebuilt entirely when new data becomes available. Additionally, their clients lacked transparency into how various products and vintages were performing, making it difficult to make informed decisions.
The Solution
Dark Sky Data partnered with the investment bank to create a hosted curve program to transform their process. This program enables the client to upload raw data, select specific attributes like product type, term, state, and marketing source, and generate curves quickly and seamlessly. The program eliminates the need for manual curve reconstruction, streamlining updates with simple data uploads.
The Results
- Significant Time Savings: Curve construction, which previously took hours, is now completed in minutes.
- Seamless Updates: The hosted program allows for real-time updates by uploading new data, eliminating the need to rebuild curves manually.
- Enhanced Client Transparency: The bank’s clients now gain deeper insights into their product performance, empowering them to make more informed decisions about future strategies.
- Improved Efficiency: By reducing the workload for the investment bank’s team, they can focus more on high-value advisory services instead of labor-intensive data processing.