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Insurance Loss Reserving —
Monte Carlo Simulation

Enter your portfolio assumptions below. The simulation runs 10,000 iterations to model your total loss distribution and reserve requirement.

Illustrative demonstration tool. All figures in USD.

Total policies in the portfolio
Expected claims per policy per year
Average cost per claim in USD
Coefficient of variation — how much severity varies around the mean (0.5 = moderate, 1.0 = high)
Percentile for reserve calculation
Running 10,000 simulations…
Key Metrics
Mean Expected Loss
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Reserve at 95th Percentile
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Risk Margin
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Simulated Scenarios
10,000
Loss Distribution Histogram
How Assumptions Drive the Reserve

This is the most important output. Small changes in frequency and severity assumptions produce large changes in the reserve requirement.

Scenario Frequency Change Severity Change Reserve Requirement Change from Base
What This Means for Your Reserving Decision

Is your reserving model built on assumptions that would survive independent scrutiny?

The sensitivity table above shows how much your reserve requirement depends on two assumptions. In a full verification engagement, Avantinfo reviews all key assumptions against market benchmarks and documents which ones would face challenge from auditors, boards, or counterparties.

Discuss an independent review of your reserving model

Contact Avantinfo →