Regulatory requirements are transforming the insurance industry—compressing reporting timelines and multiplying the number of projections required. Matching actuarial workflows to increasing regulatory demands and product complexity is a critical concern that requires an entirely new approach.
An industry facing unprecedented challenges
Existing actuarial processes do not allow actuaries to keep pace with the increasing complexity of insurance products and regulations. Companies spend weeks or months updating, executing and analysing models. You cannot scale manual work and you cannot scale a fixed infrastructure, so revolutionary changes are required to address these fundamental challenges.
A workforce constrained by legacy infrastructure
Currently, tasks such as updating models, refreshing assumptions, creating liability and asset inforce files and manipulating results files eat up nearly 70 percent of an actuary’s time. That’s a critical opportunity cost for companies that need to compete for increasingly scarce, high-level talent in a challenging global economy.
Actuaries should be focused instead on analysing results and creating value for the company, not worrying about massaging data and managing reporting systems.
Integrate: A single solution, built from the ground up
Integrate™ takes a uniquely holistic, forward-looking approach to the automation and governance of actuarial modelling and reporting. Built around MG-ALFA, Milliman’s industry-leading financial modelling system, and powered by Microsoft Windows Azure, Integrate represents a reimagining of the relationship between people, processes, and technology. Launched in 2012, it is the first industrialisation solution that is proven to manage risk, maximise efficiency and unlock the full potential of the actuarial staff.
Talent no longer isolated in silos
The Integrate platform is managed in Microsoft’s Windows Azure cloud. This allows every actuary simultaneous, real-time access to the model. So rather than 40 actuaries making changes to discrete portions of the model in desktop-bound sequestration and then struggling to reassemble all 40 pieces back together into a working model without errors, now all 40 can be working in the cloud on the same model simultaneously. Moreover, any changes that need to be validated by other actuaries can be accessed through a browser—permanently retiring the practice of trafficking spreadsheet files over email or other means.
- Ultra-scalable processing. Through Integrate, insurers tap as much computing power as they need, anytime. That translates into dramatic time efficiencies, cost efficiencies (paying only for what you use) while enabling supercomputer-like calculation intensity.
- Better deployment of highly skilled talent. Integrate frees up untold numbers of man hours of highly skilled actuaries by eliminating low-level processing tasks and the manual processes that accompany them. Less time spent on data management means more time spent on analysing that data, and higher yields on business intelligence.
- New competitive advantages. Companies are more agile and responsive, thanks to improved capital management capabilities. Although insurers need to meet quarterly requirements, market factors and other external pressures can affect the capital position every day. With Integrate, actuaries can evaluate real-time changes in market conditions on their capital position—in just a few hours.
In a large project for the Phoenix Group, the benefits of Integrate were dramatic: time to produce quarterly results was reduced 97.5%. Person hours to produce quarterly results were reduced 95%.
Other industrialization approaches look at parts of the puzzle—the systems, the people, or the processes, but not the holistic modelling environment. Integrate brings one unified solution to the table. The results are unlike anything seen before in the insurance industry.