We offer advice and assistance to a company’s appointed actuary, are able to perform most or all actuarial work for companies with little or no actuarial staff, or can provide more of an auditing role for companies with an in-house qualified actuary. Our actuarial services include:
- Statutory valuation and solvency calculation
- Dynamic Solvency Testing
- Financial Condition Reporting
- Risk Based Capital (RBC) calculations
- Incurred but Not Reported (IBNR) calculation
- Embedded Value Calculation
- Asset shares/bonus strategy
- Product development/pricing/profit testing
- Business planning/projections
- Investment strategy
Actuarial peer review
We also review the actuarial tasks and reports performed by client’s in-house actuarial department or the company’s appointed actuary in discharging his or her responsibility, which may be a necessary regulatory requirement or as part of a regular audit process.
We perform the calculation of the Incurred but not Reported (IBNR) provision for a wide range of general Takaful products and for medical/health and term products for family Takaful products. This calculation can be done for statutory purposes as well as for management reporting. We also review or perform parallel calculations as an audit of the company’s internal calculation or as a second opinion if requested by the regulators or shareholders. As part of a long term relationship with a client, we also assist the company in building internal expertise to estimate IBNR on a quarterly basis.
In a tariff driven market the need for premium rating may not be obvious. However, only by knowing in which lines or subsets of business the rate which should be charged by the operator is less than the tariff rate will the operator be able to focus marketing attention. Conversely, where the tariff rate is lower than the rate determined by premium rating this business should be reviewed carefully for ways to bring the rates in line with experience.
Risk based capital framework
One of the goals of Risk Based Capital (RBC) is to evaluate the additional reserves and capital required to increase the level of certainty of meeting known and unknown obligations and identifying sources of risk and stress testing to determine an internal capital adequacy target. As part of our analysis, we carry out stochastic testing of the variability of various liabilities using Monte Carlo simulations and fitting to various distributions. This testing can go beyond simply calculating the capital required to determine how to minimize the capital required for a required level of risk.