Service offerings and credentials

Milliman's Financial Risk Management (FRM) practices are global market leaders in the fields of product development, risk management, and outsourced hedging support services. We have more than 80 specialized consultants located in Chicago, London, and Sydney who operate as an integrated team to provide consulting and outsource services to our clients that lead the market and define global best practices. We are committed to continual research and development in these fields, which continues to define the cutting edge.

Product development

We have assisted companies with hundreds of product development initiatives, including numerous high-profile launches in new markets and market segments These have spanned the full range of solutions, including:

• CPPI
• Exchange-traded funds (ETFs)
• Fixed annuities
• Mutual fund guarantees and protection strategies
• Option budget structures such as equity indexed annuities and bond plus call option structures
• Structured products and derivative overlays
• Variable annuities
• With-profits and participating products

We are particularly active in helping our clients meet the challenging needs of the retirement savings and income market segments. Our risk management expertise and post-launch support services enable us to uniquely provide a complete end-to-end solution, enabling our clients to launch innovative products quickly at competitive prices.

Mutual fund protection strategies

We are at the forefront of product innovation and are currently rolling out a new product class: "protection account" business. These products provide managed fund exposures and market protection individually tailored to each investor's account. They enable retail investors to directly access the risk protection benefits of dynamic hedging, together with liquidity, choice of a wide range of attractive fund exposures, and protection levels individually tailored to investor needs. All of this is within a framework that requires minimal capital to support the products.

Retirement Guarantee Network

Our activity in providing risk management services to insurance companies and retirement plans puts us in a leading position to provide solutions to occupational pension plans.

Financial planning frameworks

We are also leaders in the emerging field of modern financial planning frameworks, helping companies to comprehensively frame their product propositions into holistic financial plans for their clients and advisors. We are helping to develop the latest generation of tools, calculators, and financial planning models.

Risk management

We are widely recognized as leaders in the field of risk management, with a central focus on dynamic replication and practical hedging requirements.

Hedge design and testing

Our consultants work with clients in designing hedge strategies to support a variety of product structures, spanning the full range of hedging instruments such as futures, forwards, swaps, options, and swaptions throughout all developed markets. As part of this, we have significant experience testing the effectiveness of hedge strategies using the nested stochastic projection functionality of our MG-Hedge® platform. Our hedge service capabilities uniquely position us to provide independent review of hedge strategies and third-party pricing.

Market-consistent valuations and economic scenario generation

We are particularly experienced in market-consistent valuation techniques and the latest economic scenario generation models, particularly in the context of practical hedging. Many of our clients rely on our economic scenario generation capabilities to supply them with ESG files for use in pricing, risk management, and day-to-day hedging.

Capital assessment

Our expertise extends into capital assessment, for which we regularly undertake analyses for both new products and existing in-force blocks of business. This includes both economic and solvency capital under all the major regulatory regimes.

Risk transfer

We are industry experts in risk transfer transactions through vehicles such as M&A transactions, reinsurance, risk pools, and securitization.

Retirement plan risk management and guarantee solutions

We are active in providing risk and capital management advice to pension institutions. Liability-driven investment (LDI) is a subset of our ability to design and implement sophisticated hedging solutions for defined benefit retirement plans.

Replicating portfolios

Our unique hedge-manufacturing capabilities enable us to provide replicating portfolio solutions that provide real-time capital assessments that are directly aligned to risk management and hedging decisions. MG-Hedge capabilities enable us to avoid the limitations of traditional replicating portfolio solutions relating to asset selection and optimization.

Outsourced support services

Milliman's FRM practice is a leading provider of hedging services to financial institutions. More than 30 major financial institutions around the world trust us to manage risk in their portfolios. We currently value and hedge more than 6 million investor accounts every day, relating to guarantees on assets worth in excess of US$500 billion. With more than 80 professionals, our economies of scale enable us to deliver industry best practices to our clients at low operational risk, enabling efficient dynamic replication strategies at the minimum cost. These services have played a central role in helping our clients to develop and launch products very quickly, without having to develop hedge manufacturing capabilities in house.

Hedge manufacturing

Our services include the following activities:

• Data management and validation
• Calibration of market-consistent scenario generators
• Nightly valuations of the liability options and their Greeks
• Asset valuations
• Real-time monitoring of hedge asset and liability risk positions
• Risk rebalancing recommendations
• Trade management
• Frequent financial and performance attribution reports

Introduced in 1998, our Capital Markets team has accumulated an unparalleled wealth of hedging experience. With professionals located in our Chicago, London, Sydney, and Tokyo offices, our services operate on a continuous 24-hour basis, ensuring that client positions are managed constantly. We have expertise in a broad range of derivatives, including index futures, interest rate swaps and swaptions, OTC equity options, currency forwards, variance contracts, and path-dependent and hybrid derivatives.

Milliman's independence combined with the fact that we do not undertake proprietary trading, market making, or discretionary trading activities means that we are always aligned to client objectives and are able to provide unbiased advice.

Liability valuation, financial reporting, and capital assessment

A related activity involves providing our clients with the requisite statutory and internal valuation of their liabilities, as well as ongoing production of financial reporting requirements of the business. These include, for example, the production of regular P&L, performance attributions, MCEV, and solvency capital reports.

Grid support

We provide outsourcing services relating to construction, hosting, and maintenance of distributed grid technology, as well as on-demand access to our grid facilities.