Actuarial Advisory Services
To achieve competitive advantage, companies need to understand the sources of value and key financial drivers, maximize the efficiency of capital allocation and risk, and identify and manage exposure to risk.
Our areas of focus include the following services:
Actuarial transformation — The driver for insurance companies to improve their actuarial functions may be due to a variety of reasons - cutting costs, improving controls, reducing reporting times, understanding results better, or improving forecasting and budgeting. We can assess the changes required of the actuarial functions by benchmarking existing practices against leading practice, in addition to helping to improve functionality or re-engineering the actuarial systems and financial models.
Actuarial review — Actuarial review involves reviewing the actuarial calculations performed by insurance and pension companies' in-house actuarial departments or advisors. Specifically, reviews are done on claim reserves, required capital, embedded value, cash flow projections, premium rates, or product profitability. Further, a review is often performed on the adequacy of data, methodology, assumptions, accuracy of calculations, as well as the reporting of results and the control environment.
Actuarial operations — Our experienced actuarial advisors can assist insurance companies in carrying out their "business as usual" activities within their actuarial teams. This support may range from providing assistance to insurance clients with actuarial calculations to outsourcing all or part of the actuarial process. The actuarial calculations that our team may support include: claim reserve, required capital, embedded value, cash flow projections, premium rates, and product profitability. Depending upon the audit relationship, we may also provide support for the role of reporting or statutory actuary.
Changes to financial reporting methods — Financial reporting is very complex for insurance companies due to the significant regulatory issues involved. We can support their efforts by teaming with our accounting as well as business advisory and finance and performance management teams to assist clients with adopting new reporting standards, including US GAAP reporting or Phase 1 insurance IFRS reporting. We also provide guidance with the introduction of integrated capital and performance measurement framework for internal reporting or supplementary external reporting.
Performance improvement — We have extensive experience in assisting insurance companies with improving their financial performance which typically includes support with increasing return on capital by reducing capital or improving profitability, or by investigating risk / return trade-offs. Successful performance improvement initiatives include: identifying opportunities to improve the profitability of products or new business, reducing regulatory capital requirements down to economic capital levels, investigating the impact of different asset management strategies, and identifying opportunities for offloading risk to third parties or the investment market.
Transaction support — Our experienced actuarial team has extensive experience assisting insurance companies with actuarial due diligence in terms of assessing the adequacy of reserves, capital requirements, embedded value, and cash flows. Also, to support transaction initiatives, our team typically assesses the structure and profitability of products and assists with deal structuring, playing a key role in identifying targets and supporting post-merger integration.
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