Actuarial Technical Services
Assistance with insurance start-ups
Businesses with large current and prospective client bases have the opportunity to add value to their customers by offering insurance packages linked to the product or service they offer.
These businesses benefit from:
- Differentiating themselves from their competitors with a value add insurance product
- Partaking in the insurance profits
Our team works with these businesses in order to execute insurance offerings for their client bases. The implementation of an insurance offering to their customer base includes (amongst others):
- Commercial analysis
- Product design and specification
- Drafting the appropriate policy and procedure (claims and underwriting) documents
- Assistance with setting up the appropriate sales and distributional structures
- Assistance with setting up the appropriate administration structures (new policies, claims, maintenance and cancellation policy administration)
- Marketing strategy
- Capital reserving, treasury and investing
- Selecting the appropriate reinsurance strategy
- Engaging insurance regulatory authorities
- Obtaining or renting licenses
- Setting up the appropriate support and risk control functions, for example, audit and finance
In most countries, actuarial valuations (for both long and long term insurance and pension) are a mandatory requirement, enforced by the local insurance regulator. Many regulated institutions view a valuation as a process of compliance, deriving little value from the vast potential that can be extracted from the valuation.
Our firm ensures that the valuation report which we produce becomes a critical tool for the evaluation of a client’s business performance, rather than a mere means of compliance with local regulation.
During any actuarial engagement, our actuarial professionals adhere to the local regulation and actuarial professional guidance. For elements of a valuation where actuarial discretion is required, we consider the impact of decisions on the insurer/pension fund, the policyholder/member and other significant stakeholders to arrive at a fair and prudent result.
The valuation process involves a series of high-level steps, which comprise inter alia of the following:
- Interviews with management in order to establish an initial understanding of the business as well as past trends which have occurred
- Data requests, cleaning, consolidation, analysis and interpretation thereof
- Selection of the most appropriate valuation model/techniques, given the client’s asset and liability characteristics
- Estimates of reserves for claims which have occurred in the past and those which are likely to occur in the future (claims and premium technical reserves)
- Asset liability matching which considers the term, value and currency of assets and liabilities
- Estimation of the Capital Adequacy Requirement (for insurers)
- Providing an opinion on solvency
- Communication of results
- Documenting additional findings and recommendations from the valuation process, which are extremely valuable to our clients
Product analysis, development and pricing
We assist our clients with the analysis and overhaul of existing products, as well as the development, design and pricing of entirely new and innovative products. Our product development and pricing expertise is applicable to long term and short term insurance, as well as specialised financial products.
The product analysis process would involve a series of high level steps which will comprise inter alia of the following:
- Expense analysis in order to understand the expenses attributed the new or existing product
- A review of the level of reinsurance for each product/line of business and the adequacy thereof
- Consider and research industry norms
- Financial model in order to determine the profitability of a product, taking into account the capital and reserving requirements
When designing products, we take cognisance of our client’s institutional capabilities, appetite for risk, solvency levels, clients potential offering and, most importantly, the demands of the market and distribution channel.
Mergers and acquisitions (M&A)
Given our firm’s past M&A experience and actuarial/insurance background, our teams are equipped with the necessary skills and expertise to advise clients in the insurance industry, should they be interested in either merging with or acquiring a competitor.
Analysis and optimization of distribution channels
Our team has extensive experience in working with the some of the largest insurance and reinsurance companies on the continent. Jaltech has been the principal on various initiatives intended to improve sales and distribution.
One such initiative involved an organisation-wide review of an insurer’s distribution and sales channel. This review led to the development of a distribution and sales channel, which was considered, at the time, the “gold standard”.
The experience gained and the knowledge of this vital cog in an insurer’s business has proven to be priceless. Jaltech has used this experience to assist multiple clients with achieving value-added results in their own sales and distribution channels.
Asset liability matching
Assets and liabilities should be intricately intertwined, rather than exist as separate concepts. When designing an asset liability matching solution, we seek to understand the unique characteristics of a client’s liabilities so that we are able to find an optimal structure of assets to satisfy them.
Analysis of risk exposure and reinsurance strategy
Part of the analysis of a client’s insurance business involves assessing the level of risk inherent in each product line of business as well as in the entire portfolio. Once established, we are able to identify a reinsurance strategy, which is optimal for a particular client’s level of risk and solvency position.
We have also developed strong relationships with major reinsurance players. This enables us to assist clients with setting up mutually beneficial reinsurance arrangements which are aligned both to a client’s risk appetite as well as their operational requirements.
Process analysis and redesign
Jaltech’s teams are able to perform an in-depth business assessment, in order to identify any gaps or areas requiring optimisation. This exercise involves investigating existing client processes, policies and capabilities and, once done, refining these to improve turnaround times, risk management, and costs. Areas of focus, specific to an insurer, include:
- Claims management and underwriting processes
- Claims management and underwriting policies and philosophies
- Systems integration
- Reinsurance treaties and overall philosophy
The optimisation of operations has the potential to lead to increased competitiveness, through:
- Reduction in turnaround times for claims resolution
- Reduction in costs, which lead to the ability to increase pricing competitiveness
- More efficient client acquisition
- Increased market share
This means that the benefits gained through such an exercise, are passed on to the consumer as well.