Benchmarking
Actuarial Partners can assist in determining:
- Relevant industry benchmarks
- Developing industry surveys to ascertain industry standards and the reinsurer’s position
- Analyzing the reasons for the insurer’s position in the industry
Information Management
It is vital that insurers capture appropriate information to ensure awareness of trends and understand the profitability of all lines of business and subsets of the business. This information is then used in formulating business and marketing plans focusing on the business subsets which give the most value to the company. Actuarial Partners can assist in the development of efficient management information systems and analyze which variables should be kept in this system.
Business Planning
Actuarial Partners can provide detailed financial modeling which is essential for effective business planning. These models can assess the effects of new market entry on shareholder profit, or test the effects of varying bonus or dividend rates on company profitability.
Reinsurance optimization
The level and type of retakaful in place can have a large effect on profitability. We can assist in investigating the financial impact when varying an operators current retakafuls arrangements and retention levels. This is performed using statistical modeling, and results in a distribution of profits across various scenarios.
Financial Modeling
Actuarial Partners can provide appraisal valuation, dynamic solvency testing and financial condition reporting utilizing a range of financial models.
Our financial modeling services can also assist in the strategic running of the company, and includes the following services:
Profitability Analysis – Company profitability projections, both for the company as a whole under various scenarios as well as business subsets. It is also used to determine the appropriateness of existing, new or proposed products.
Capital Management – Capital requirements projections under various scenarios. This can be used in assessing the cost of capital and the trade-off between maximizing the level of capital in order to give assurance to policyholders and regulators and minimizing capital in order to maximize the return on capital to shareholders.
Asset and Liability Modeling (ALM) – Invested assets and policy liability cash flows projections using stochastic modeling. Projection are performed using different economic scenarios, risk level of assets, new business written and level of capital requirements. They are used to understand and quantify the level of investment risks due to mismatching between assets and liabilities. This analysis can also be used to assess the impact of falling interest rates and volatile equity markets on minimum guaranteed rates of return or benefits to policyholders as well as managing investment risks by product redesign.