Case Study: Letting the database do the hard work

Data on a screen

Actuarial Process Reengineering

MBE worked with a large UK Life Company, reviewing their valuation processes and looking to improve their processes with regards to reporting deadlines.

The problem

Our client is the life actuarial team of a large UK Life company who were looking to improve their valuation processes. The current systems and processes would have resulted in them struggling to meet the new quarterly Solvency II deadlines.

The life actuarial team processes information from multiple policyholder administration systems. The corporate actuarial team produces the quarterly/annual liability and capital figures that are used by management and also for public/regulatory reporting purposes.

Over time, the demands on the teams have increased dramatically with the processes becoming impeded by too many manual steps.

The team also wanted to be future-proofed for further regulatory and reporting changes e.g. IFRS 4 phase 2.

In addition, they wanted to ensure that data quality was in line with Group Data Management Policy and TAS (D), and enhance the quality and accessibility of management information.

The key challenges

MBE identified several key problem areas with the current operation during the analysis phase:

  • Current systems were not used in the most efficient way.
  • The data and assumptions were managed through a large number of .csv and .xlsfiles, while the results were analysed by loading data manually into various database solutions.
  • A large number of different systems were used which resulted in multiple handover phases. This increased the process risk and the number of required checks.
  • Historically the processes had been developed in silos and as a result, there was no standardisation across the organisation.
  • Reporting mechanisms were was unwieldy, with no centralised data source to control and assess the data quality.
  • The current flat team structures caused bottlenecks in the sign-off process.

The solution

In order to overcome these problems, MBE has implemented a central data repository for managing model points, assumptions, manual adjustments and modelled results. In so doing, we have been able to identify and automate the key controls in the process.

In addition, we have developed an approval functionality that will allow a full audit history of the data, including data lineage for all of the data used in the end-to-end process. This is in conjunction with changing the team structure to reduce the bottlenecks and hand-off points.

Fofuture-proofing, there was also a full mapping of the end-to-end data flow to improve visibility and to identify complexities.

The benefits

The benefits of the solution are wide ranging, and include:

  • The number of automated tasks has been increased, which has resulted in an increase in the capacity of the teams to take on additional workload.
  • Future maintenance has been reduced.
  • High value resources have had their capacity increased in order to analyse information and focus on the key tasks.
  • There has been increased accessibility of data and visibility of the controls.
  • Visual management has ensured that the focus has remained on the key operational issues.
  • Operational risk has been reduced, with increased traceability and auditability of the data.
  • The overall scalability of the process has been increased, giving greater scope for future expansion.

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Christo Muller