The challenge

After the acquisition of an insurance business, the acquirer faced the challenge of managing the transition, complying with regulatory reporting, business planning, financial condition reporting, and performing experience analysis. Servicing these regulatory and business requirements requires valuable time and resources; companies may prefer to deploy these resources on more forward-looking business goals and strategies.

When deciding how to structure and resource the actuarial function, the management team had a number of key points to consider:

• “How do we efficiently transition actuarial processes to an outsourced model without sacrificing quality?”
• “We need a sustainable, long-term solution that can adapt to regulatory and business changes.”
• “We want to leverage technology and expert support to modernize and streamline actuarial reporting, freeing up internal resources for strategic priorities.”

What follows is an example where Milliman supported a company post-acquisition with transitioning actuarial processes from the previous owner and implementing IFRS 17 and the new Hong Kong Risk-Based Capital (RBC) framework, demonstrating the importance of an agile solution that can adapt to evolving regulatory and business requirements seamlessly.

The approach

After acquiring the life insurance company, our client was looking for expertise to manage the actuarial function and a solution that was:

• Cost efficient
• High quality
• Modernized
• Flexible and scalable

Milliman team based in Dublin and New Delhi offered the client the ability to outsource the actuarial function, resulting in efficient and cost-effective management of all actuarial processes.

Scoping and transition of the processes

Milliman’s initial objective was to work closely with the company to define the scope, set timelines, and assemble a team with the necessary skills and expertise to meet their needs. This phase included a comprehensive review of the existing actuarial models and reporting processes, the identification of operational risks, and the documentation of findings to support a smooth and effective transition. The next step was to meticulously replicate the client’s processes, within the agreed timelines, to establish confidence in the quality of the work. After successful test runs, the production of actuarial results was fully transitioned to Milliman team.

Highly scalable solution

Milliman is experienced in managing both short-term and long-term projects for clients all over the world. Outsourcing provides additional flexibility, including the capacity to increase or decrease the size of the team to meet changing requirements, and the scalability to accommodate clients’ evolving needs. During the transition phase, Milliman team received thorough training and handover from the client’s outgoing team, documented all the actuarial models, and implemented a series of process improvements. The transition also involved scaling resources and modernizing the processes for business continuity and handling simultaneous reporting on multiple regimes.

Actuarial process modernization

The Milliman team focused on modernizing all outsourced actuarial processes by migrating manual processes to our modelling platform, Milliman Mind, and implementing audit controls in the system to help ensure quality without compromising speed of execution.

The solution

With the transition complete, Milliman team now provides ongoing, end-to-end actuarial support for the company.

Milliman team handles ongoing reporting and support management decision making, including:

• Quarterly and annual solvency, value of new business, and IFRS 17 reporting
• Preparing a business plans and supporting our own risk and solvency assessments
• Maintaining all models, documentation, and reports produced for regulatory submission
• Continually maintaining and improving models to support changing business objectives and regulatory compliance
• Maintaining transparency and accountability by agreeing on deliverables and deadlines in partnership with the company

This structured approach allows the company to maintain uninterrupted and efficient actuarial operations, achieve regulatory compliance across jurisdictions, enhance reporting and planning capabilities, and focus internal resources on strategic priorities – all while relying on the consistent quality and dependability of Milliman’s support.