🇦🇺Australia

Claims Leakage

2 verified sources

Definition

Inaccurate reserve estimation contributes to claims leakage, exacerbated by market pressures like catastrophes and supply chain issues, leading to sustained cost pressures.

Key Findings

  • Financial Impact: AUD millions in annual leakage; 5.5% p.a. increase in average bodily injury claim size
  • Frequency: Ongoing, intensified by catastrophe seasons
  • Root Cause: Manual processes and lack of advanced risk modelling in reserve posting

Why This Matters

The Pitch: Claims adjusting players in Australia 🇦🇺 waste millions annually on claims leakage. Automation of reserve estimation eliminates this risk.

Affected Stakeholders

Actuaries, Claims Adjusters, CFOs

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Reserve Posting Bottlenecks

AUD 2-5% operational cost overrun from delays (industry standard leakage)

Inaccurate Reserving

Reduced profitability; premiums up due to 5.5% p.a. claim cost growth

Fehlentscheidungen bei Tarifindikation durch unzureichende, nicht standardisierte Aktuariatsdokumentation

Quantified (logic-based): Bei einem Portfolio mit AUD 200 Mio. Jahresprämie führt eine 1–3 % systematische Unterpreisung oder nicht realisierte Erhöhung zu 2–6 Mio. AUD jährlichem Ergebnisverlust; skaliert auf mehrere Linien kann dies 5–15 Mio. AUD p.a. übersteigen.

Überhöhter manueller Aufwand bei der Erstellung von Aktuariatsunterlagen für Tarifgenehmigungen

Quantified (logic-based): Typisch 100–200 Aktuarsstunden pro Filing à ca. AUD 250–350/Stunde = AUD 25.000–70.000 direkter Aufwand je Tarifrunde; bei 6–10 Filings pro Jahr entstehen 150.000–700.000 AUD jährliche Personalkosten, wovon 40–60 % (60.000–420.000 AUD) durch Automatisierung und Standardisierung reduzierbar sind.

Decision Errors in Catastrophe Modelling

AUD 10-50M+ in unreserved losses per major event due to model discrepancies; global AAL $152B with Australia exposed to cyclone/earthquake/bushfire[1][4]

Cost Overrun from Loss Adjustment Expenses

AUD 10-30% overrun on gross losses from unmodelled LAE and demand surge; contributes to $145B insured losses in 2024[1][8]

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