Client case study: South African subsidiary of a worldwide life reinsurer transforms cash flow projections

The challenge

The client had a complex cash flow model in Excel, VBA, and SAS. After years of modeling 12 different life insurance products policy by policy, the system was difficult to maintain, and the runtimes were too slow to complete all the required stress tests within the client’s timeframes.

The client’s primary challenges were an obscure VBA code that was prone to error, no clear split between data and modeling, manual calculations using macros and pivot tables, and the use of third-party software (SAS) to compile results.

The life reinsurer sought out a cash flow model that could provide the following:

• Support for larger datasets
• All references to data updated automatically
• Less manual intervention
• Aggregation integrated within the model

If you’re like other insurers in this situation, you might have thoughts like:

“We need transparency in our modeling and formulas for regulators, our investors, and our team.”

“We need cash flow projections more quickly than our model can produce them.”

“We are ready to move our complex cash flow projections model from multiple programs to one accessible system.”

The approach

In Milliman Mind, the formulas are easy to locate within the model. The model is also segregated from the data, which creates a tool that is transparent and auditable, greatly reducing the risk of error. This makes the model accessible not just to programmers, but to actuaries and management as well.

By migrating all data to cloud based Milliman Mind, models can be run in a fraction of the time, reducing the hours spent preparing projections and reports.

The solution

The reinsurer benefited from the move to Milliman Mind in multiple ways. It was able to reduce the run time for the model from three hours to 40 minutes. By eliminating the complex VBA code and the third-party SAS software for data aggregation, the team now shared one single workflow for the entire process.

Now, the subsidiary company can make cash flow projections for its entire business with just one click. The full closing of accounts contract by contract, the consolidation, and required report outs are completed with accuracy, transparency, and confidence.

Learn more about what Milliman Mind can do for you, here.