Actuarial Transformation

Totally new to our set of offerings and indigenously developed, actuarial transformation services constitute the best of what we have to offer to insurance companies. Actuarial transformation is all about transforming the existing actuarial process into those that provide you with the competitive advantage over your competitors.

Our actuarial transformation offerings generally encompass the following aspects:

Cloud migration

We are introducing our cloud offerings to make the most of the new opportunities for growth and scale made possible only recently. Through our IT partners and our own direct functional expertise, we offer feasibility assessment, roadmap, governance and then implementation services for insurers considering whether to move whole or part of their actuarial processes to the cloud. We have experience with Amazon Web Services and Microsoft Azure.

Data systems

Transformation of data systems involves transforming the architecture of these systems or re-engineering the processes that feed into or emerge from those data systems. A full-scale transformation exercise can release significant resources which are usually tied up in managing sub-optimal data systems.

Companies are gaining significant advantages in setting up an enterprise-wide data warehouse, either on the cloud or on premises. Even for companies reluctant to move to the cloud, a data mapping exercise and SPOC analysis can reveal improvement opportunities, in a short span of time.

Data governance policies are now required by several insurance regulations, such as Solvency II. Even when not required by any particular regulation, companies can gain substantially by having a governance structure in place to make the processes more robust and less dependent on individual resources.

Actuarial systems

Actuarial systems are integral to all insurance companies. Transforming actuarial systems would involve one or all of the following:

  • Technical review of actuarial models for ensuring accuracy and actuarial best practices
  • System review of actuarial model for ensuring optimal run times, memory and other IT aspects
  • Gap analysis in actuarial modelling capabilities and development of technical models to fill those gaps, such as derivative modelling or Economic Scenario Generation
  • Implementing Systems of Governance (SOG), documentation and other risk mitigation measures such as End User Computing (EUC) controls
  • Implementing parallel computing technologies such as High-Performance Computing (HPC) to minimise the run times.

Reporting systems

Reporting systems are all about the processes that take information from actuarial systems and convert them into reports containing information for various internal (e.g. senior management) or external stakeholders (such as regulators).

Our experience has shown that this is one area where significant capacity is freed quickly without involving a detailed transformation exercise. A typical re-engineering exercise here would entail mapping the flow of information from actuarial systems to various reports, performing SPOC analysis and identifying which areas of business are receiving too much information and which areas too little.

Regulators of many countries require that the insurers report their financial disclosures to them within a much shorter period. Company’s own management also needs results fast in order to make informed and timely decisions. Automation tools for populating these reports can bring huge benefits in shortening the overall cycle time. At the same time, resources can be moved away from populating numbers to performing analyses on those numbers.

Efficient reporting systems are critical for making informed decisions and therefore restructuring of reporting systems presents a worthwhile business opportunity.

Documentation

Documentation is a very important part of running actuarial operations successfully. It is often overlooked or de-prioritised, but insurers in the past have incurred huge losses because of not adequately documenting their processes. Regulations such as Solvency II now require all of the insurers’ processes to be fully documented.

Inadequately documented processes are under constant threat that the people familiar with those processes could leave or may keep forgetting small parts of these processes over time. It is very hard for a new person to get started on processes that are not documented and run a risk of mistakes due to lack of understanding.

From our experience, even the most diligent and committed companies often fail in their documentation efforts because of a lack of a clear documentation strategy or end objectives and simply relying on the developers or users to author documents as they go along.

That is where our expertise on documentation can help. We have helped UK insurers in their documentation efforts for compliance with Solvency II and IMAP. We can help by:

  • Creating a documentation framework specific to your company which you can implement with the help of your own staff
  • Or, we can go a step further in helping you write efficient and meaningful technical documents

Get in touch with us if you think your organisation is facing significant operational risk because of undocumented processes.

Governance

Just like documentation, governance around actuarial processes does not feature very high on the priority list of many insurers. Regulations such as Solvency II has mandated to define Systems of Governance (SOG). Such SOGs specify the roles and responsibilities of individuals, process change procedures, checks around the use of external data or models and other details around how actuarial processes will be governed.

In the absence of governance policies, companies run the risk that their processes, even though developed efficiently, will change over time as different individuals work on those processes. On the other hand, any errors or inefficiencies in a process may not be removed as individuals may not be inclined to take ownership.

Governance is also an integral part of a meaningful Enterprise Risk Management framework. The key to achieving good governance practices is to start with a clear strategy and having sight of the end objectives.

With years of experience in developing SOGs for insurance companies seeking to comply with Solvency II, we can help your organisation in developing a robust governance framework. Book a meeting with our expert to discuss your requirements.