The benefits of streamlining and automating actuarial processes are evident in this recent case study, as Joel Fox explains
Much is made of the possibilities of technology to "industrialise" actuarial processes that are time consuming and labour intensive, but what gains are achievable in real life?
Willis Towers Watson recently demonstrated how its Solution for Life suite of software, technology and consulting services was able to bring a host of benefits to the Solvency II production schedule of a with-profits fund.
Solvency II is challenging actuarial teams to produce results faster than ever, in the face of commercial pressures and the need to reduce operational risk. In response to these challenges, Willis Towers Watson developed tools and techniques that have, in this case study, cut by two-thirds the time required to produce the results and reports – and with half the resource.
The company involved was Chesnara, a UK-based life and pensions firm, which has outsourced actuarial administration of its Countrywide Assured fund to Willis Towers Watson since 2014. Our motivation for improving the actuarial processing was clear: any process improvement must satisfy a cost/benefit analysis, just as any other insurance company would. We initiated a proof-of-concept using the Solutions for Life suite on a ring-fenced with-profits fund.
The scope of the project began with ready-to-use policyholder and asset data, moving through to delivery of all reporting requirements. Controlling, automating and governing the actuarial processes – listed in the chart below – was the focus.
We approached the project with the philosophy of improving on the current approach and optimising the critical path. We wanted to remove all manual processing and manual updating of spreadsheets, and limit actuaries' interactions to points where they needed to review or challenge inputs and results.
Willis Towers Watson software solutions were used: workflow automation was provided by the Unify platform; financial modelling was performed with RiskAgility FM; we used DataValidator for data validation, cleansing and aggregation; and the virtual grid solution, vGrid, provided on-demand compute power.
Following a dry run completed in November 2015, the benefits in terms of time and efficiency were evident: a timetable of 32 days was reduced to 10 and the resource required for a quarterly valuation was cut by 50%. Qualitative benefits – such as higher quality information and the ability to automatically perform change analysis – were realised.
The success of the project means it is now being rolled out to the remaining funds, and an expansion to a full end-to-end process is already underway.
For further information about this case study or Solutions for Life more generally, contact me or another Willis Towers Watson consultant.
Joel Fox is Global Life Financial Modelling and Reporting Practice Leader at Willis Towers Watson. Email: [email protected]
Companies:Willis Towers Watson
