With the fragile state of the current housing market, rising numbers of foreclosures, and the greater diversity and risk level involved in mortgage loan products, an economic downturn could result in severe losses for lenders and insurers.

Our decades of experience and customized analytical tools enable our clients to understand long-term risks and adequately prepare for and manage the risk associated with economic downturns. We have invaluable experience working with major insurers and lenders in the United States and clients around the world.

Our primary mortgage-related services to financial institutions, insurers, reinsurers, and rating agencies include:

• Credit risk analysis: We determine baseline loan-level default rate and loss severity assumptions. We also forecast the volatility of credit losses in order to assess the myriad of outcomes that define the credit risk spectrum. Our analyses include advanced loss-timing assessments, prepayment rate analysis, geographic market risk, exposure assessment, loss reversing, and portfolio valuations for bulk purchase or sale. We develop stochastic risk models for evaluating pricing structures and economic capital modeling.
• Reinsurance performance metrics: To help our clients design enterprise-wide risk models, we developed Virtual Metrics™—a reinsurance performance metrics risk management platform. This powerful dashboard product reveals how a client’s risk profile compares to industry benchmarks and to their peers. Virtual Metrics combines client data with industry information and helps lenders to aggregate their portfolio of risk, determine risk characteristics and segmentation, and even drill down to a granular level to identify contributing factors. Virtual Metrics enables our clients to make better-informed strategic decisions and save money by pointing out loans that may be missing from a potential transaction.
• Captive services: We evaluate all aspects of business strategies and captive insurance business plans. Our rigorous structure analysis includes reinsurance agreements review, pricing, risk transfer quantification, capitalization modeling and financial projections. We also assist captives with reserving, risk management, operations, and financial reporting.

Milliman listens carefully to each client’s objectives, and offers independent assessments and advice for its particular market. We communicate our findings using easily comprehensible language, visuals, and clear examples so our clients benefit from the full value of our work.