How Lloyd's of London uses R for Insurance

Lloyd's is the world's leading specialist insurance market, and is often the first to insure new, unusual or complex risks. So it's no surprise that Lloyd's is one of the many companies that use R and its advanced capabilities for data analysis to help manage its insurance risks. At the useR! conference last month, Lloyd's analysts Markus Gesmann, Viren Patel and Gao Yu presented a poster "Using R in Insurance: Examples from Lloyds" showing how the insurance giant makes extensive use of R. After the jump you'll find examples from the poster of how Lloyd's uses R for performance management, exposure analysis, Monte-Carlo simulation, data visualization, reporting, and much more. 

[Update Sep 19: The poster itself is now available from this blog post.]

Performance management

Lloyd's syndicates are compared to the market and against their individual business plans.

Bespoke reporting

A combination of R and LaTeX is used to generate bespoke analytical reports for more than 80 syndicates. 

Exposure analysis and reinsurance

Lloyd's uses R to manage its exposure by analyzing reinsurance and catastrophic risk.

Lloyds also uses R to generate KML files, allowing analysts to visualize the exposure of geographic regions to disasters like hurricanes and earthquakes using Google Earth.

Interactive Data Visualization

Online analysis tools for the Statistics Relating to Lloyd's service were created using R and the googleVis package.

A general statistical toolset

Lloyd's also uses R as a general-purpose data analysis and visualization tool, as for example in this Monte Carlo simulation of loss distributions.

Comments

[Vivian]

I learned a lot from this post. Thanks a lot,David!

If anyone is interested to explore more about how Lloyd did certain approach , you may search for "Markus Gesmann" or "Lloyd paper".

[ppi claims]

Thanks for the illustration. I also heard that Lloyd's insurance operates in the cloud model where data is centralized and amalgamated from all over servers into the central mainframe.

[Need]

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[Aaron Balrath]

Thanks for giving such a learnable post. It is good to see that R insurance is helpfull at the times of hurricane and earthquake. It is very easy to understand the products with the graphical representation.

[orv]

Nice post. Thanks for sharing. I want to use some of your graphs for my school project if that is ok with you.