1 optimization problems
For a mid-sized insurer writing 50-300 million TRY of annual premium across auto, health, liability, property and marine lines. Every balance-sheet date the actuary must answer one question: what is the total cost of all claims already incurred but not yet fully paid? This figure is the largest liability on the balance sheet — under-reserve and you face insolvency, over-reserve and capital sits idle. Claims are sometimes reported the same day and sometimes months later, and payments stretch over years, so simple averages in a spreadsheet produce systematic errors.