Insurers, spreadsheets and model risk

Spreadsheets are powerful, versatile and accessible to almost anyone. It is no surprise, therefore, that across all business functions actuaries and other insurance professionals consistently turn to spreadsheets to perform a wide variety of tasks of differing complexity and materiality, ranging from performing simple calculations to using spreadsheets as tools to inform key business decisions.

Milliman has surveyed nearly 200 life actuaries and insurance professionals to understand the way they use spreadsheets in their work, including looking at potential improvements that could be made to this important tool. In this article we analyse the results of this survey, highlight our key findings and consider the benefits and risks arising from a reliance on spreadsheets.