Cloud computing and business advantage: Perspectives from Phoenix Group on MG-ALFA
Milliman's cloud-based industrialization solution allows the Phoenix Group to increase run times, expand modeling capacity, reduce operational risk, and free up critical resources.
Video transcript
Perspectives on the Cloud
Mark Hutton (AST Business Lead, Phoenix Group): When we set out, we were just looking for a ramp-up/ramp-down compute facility. It was shortly after we had engaged with Milliman that Azure became a workable option.
Andrew Rendell (Deputy Chief Actuary, Phoenix Group): We’ve got a wide variety of different funds that have come from different legacy businesses, so the more we can harmonise that to look at all of our businesses in the same way, it makes it easier for us to do the sums and produce the reports, and it makes it easier for the board and other stakeholders to understand what’s going on.
Tony Kassimiotis (Managing Director, Operations, Phoenix Life): It was a huge eye-opener because essentially it was a bit like tapping into a vast array of resource capacity that allows us to deliver the actuarial modelling significantly faster than anyone had seen before.
Nick Watkins (Head of Non-Profit and With-Profit Actuarial Reporting, Phoenix Group): There are many things that are massively different: stochastic modelling, lots and lots of different capital requirements, which means that you have to run lots and lots of models lots and lots of times and for that you need massive amounts of computing power. The advances in technology have helped us to do that.
Mark Hutton: Around the time we were doing the business case, we took part in a roundtable discussion with other UK insurers. The biggest insurer there had just increased their private grid from 1,000 to 2,000 processors. We have access to 50,000 at the flick of a switch. We’re just operating in a different universe now.
Katherine Meakin (AST Program Manager, Phoenix Group): There was quite a eureka moment when calculations were done so quickly and the results came out so quickly, and I remember someone saying to Mark Hutton, “What can I see? What is it that’s doing all this?” Mark took him to the window and pointed to the sky and said, “See that cloud there?” That was a total mindset change that we didn’t have a box whirling away in the corner. We were utilizing processing power that we didn’t have to purchase. We paid for what we needed when we needed it.
Nick Dumbreck (UK Practice Leader, Milliman): It certainly led to a lot of advantages for Phoenix. They can produce their results much more quickly, they have a lot less risk in producing those results, and they needed a lot fewer people to operate the systems than the ones they have replaced.
Andy Moss (Finance Director, Phoenix Life): That means for our staff and our actuaries that we can use our qualified actuaries and our training actuaries in what should be a much more fulfilling role for them around the analysis side rather than the process side where traditionally we have spent quite a lot of our time.
Nick Watkins: The ability to have the standardised processes where on future acquisitions we can literally just take their models and transform them into ours is something that will just make that process so much easier and give us a massive advantage on our competitors. That’s the thing that will really give us the big wins in the long-term.
Mark Hutton: The key thing that the cloud brings you is an almost unlimited access to computing power. You can’t really ignore that.
Tony Kassimiotis: Ultimately though, it’s about getting the application and the Azure platform to work well together and those results are fantastic and I think that’ll only get better as that environment, which is embryonic today, continues to be optimized and move forward.