Actuarial and insurance

Section 13 Transfers allow for the transfer of insurance business between legal entities without the individual novation of contracts. As such they represent a commercially viable and cost-effective mechanism to restructure a group’s insurance operations.

In order to complete the transfer of policyholders from one insurance company to another, perhaps through a sale or otherwise, requires an Independent Expert to opinion on the impact of the transfer on the policyholders. The Independent Expert’s Report considers the consequences and likely effects of the Scheme on Transferring Policyholders and Remaining Policyholders of both companies involved in the transfer. The independent actuary is particularly concerned with assessing whether the security of benefits of these groups of policyholders might be materially adversely affected by the Scheme.

Our experienced actuarial team, whether in be in the Life or Non-Life Industry are well placed to act as the Independent Actuary in such circumstances.

The insurance industry is constantly evolving – there’s ever-increasing competition, regulatory requirements, product complexity and economic uncertainty. Our actuarial practice provides a wide range of services to help your organisation manage these demands. We’re a team of experienced actuarial professionals dedicated to adding value to our clients’ organisations through practical, timely solutions. Our topical market knowledge of the insurance industry, our actuarial background and knowledge of the financial framework and accompanying processes helps our clients achieve their goals.

Our services include:

• Product design and pricing services in the life and non-life areas
• Reserving, financial management and analysis
• Modelling services
• Internal audit

Effective from July 1, 2022, the Central Bank of Ireland (CBI) introduced new regulation regarding differential pricing for home insurance and motor insurance policies. Key elements of this regulation include:

• Treating customers fairly
• Annual review process
• Renewal documentation
• A timeline of complying with the regulation

Our Differential Pricing in Practise report provides an overview of the regulation, along with our view of market best practises for pricing governance, controls, and monitoring, as well as wider considerations in practice.

Differential Pricing in Practice

Understand the background considerations for pricing actuaries and underwriting teams

The aim of IFRS 17 is to standardise insurance accounting globally to improve comparability and increase transparency. It aims to provide users of accounts with the information they need to meaningfully understand the insurer’s financial position, performance and risk exposure. It will impact a Company’s financial performance, operating model and other areas of the business such as product pricing, remuneration policies and financial planning. At Deloitte, our collaborative approach means that our actuarial specialist will work alongside our accounting, IT and consulting colleagues to deliver you the full suite of IFRS 17 services.

IFRS 17

Please visit our IFRS 17 Topic page for all our latest updates, event information and IFRS 17 video series.

At Deloitte, we are able to provide the required breadth of service expertise that ensures all aspects of Solvency II requirements and opportunities are considered and we can support you through the entire process by providing services including:

• Central Bank of Ireland Domestic Actuarial Regime peer reviews
• Methodology and process reviews
• Actuarial function services on a support or fully outsourced basis, including:
  - Calculation of technical provisions
  - Undertaking the role of the Head of Actuarial Function (HoAF)
• Capital modelling:
  - Complete or partial set-up of internal or standard models
  - Packaged standard formula model solution, including production of Quantitative Reporting Templates (QRTs)
  - Review / validation of standard formula and internal models
  
• Process, data, documentation and system improvements as required to meet Solvency II requirements
• Tailored training for Boards, management and staff

We have a dedicated Actuarial Modelling Centre (AMC) which is our center of excellence for actuarial modelling, data warehousing and business intelligence solutions. The AMC uses our standard management and project frameworks to deliver modelling engagements. Our expertise in this area is underpinned with our market leading approaches, frameworks, tools and training to support the delivery of actuarial modelling, data warehousing and business intelligence solutions to our clients.

Actuarial Modelling Centre (AMC)

Delivers actuarial modelling, data warehousing and business intelligence solutions to our clients

By combining our skills with those of our corporate finance and Legal colleagues, we can advise insurance and reinsurance companies seeking to enter the Irish market on the:

• Regulations and (re)insurance laws that apply
• Preparation of the (re)insurance license authorization application for submission to the CBI
• Features of the Irish market - competitors, product data, product design, pricing and product strategy – through conducting market research

Through our restructuring expertise, we can address concerns for both the buyer and seller and we can assist senior management in identifying key risks and, making informed decisions about their restructuring strategy. Working on either the buy side or sell side we provide full valuation services, Independent Actuary reports as required for portfolio transfers under Section 13 and due diligence reports.

Data opportunities and tougher market conditions are driving the need for the insurance industry to look at data analytics. Using data intelligently, an insurer can extract insights that guide decision-making and achieve better results at every point of the customer life cycle, from market segmentation, pricing, cross selling, adding customer lifetime value and retention modelling.

Analytics uses advanced statistical techniques to analyze large quantities of internal and external information to unlock previously unknown, but meaningful, business relationships allowing clients to significantly improve profitability. Analytics has a wide range of applications including:

• Maximising conversion rates by gaining insight to customer and agent behavior
• Maximising profitability by understanding the price elasticity of different customer/agent segments
• Increasing profitability by focusing underwriting resources on more complex risks
• Increasing the likelihood of successful cross-sell by targeting marketing resources more effectively
• Improving customer experience by selling the right product, at the right time, through the right channel
• Minimising lapses / optimising renewals by understanding key persistency drivers

There has been an increased focus on improved risk management across the insurance industry. Whilst changes have been implemented, there are still significant opportunities for (re)insurers and other financial institutions to strengthen their risk management processes.

With our expertise, we can help your company keep on top of emerging changes in regulation and developments in risk management practices across the market.

Our actuarial and risk professionals can help:

• Design or review your:
  - Risk management framework
  - Risk appetite statement
  - Risk policies
  - Risk limits
• Create value by optimizing capital allocation and proposing appropriate risk response strategies
• Assess and improve the risk culture within your organization
• Act as, or provide support to, your risk function including provision of a Chief Risk Officer (“CRO”)
• Provide tailored risk training programs

By combining our skills with those of our Management Consulting colleagues, we bring solutions to our insurance clients that improve the operational efficiency and effectiveness of their businesses, through:

• Finance transformation programs
• Reviewing the effectiveness of finance and actuarial functions, including model efficiency and rationalisation
• Providing insights on your operational results through the use of analytics
• Providing advice on vendor software packages