Warrenfam

Claims Reserving

Claims reserving is a vital area of insurance company management, which is receiving close attention from shareholders, auditors, tax authorities and regulators. Certification of reserves is already a regulatory requirement in many countries.

We are able to provide an independent assessment of the likely development of reserves, to support statutory reporting and sound risk management decisions by our clients in managing their liabilities. Our analysis includes consideration for IBNR (Incurred But Not Reported) liabilities, adequacy of individual case reserves and reserves for other costs, such as claims handling expenses and catastrophes. Our analysis may also include provisions for unearned premiums and additional unexpired risks, if required. In our reports, we provide future cash-flows and discounted values of our estimates, if requested. We usually use a wide variety of actuarial techniques and advanced statistical models as well as stochastic models when applicable, to determine the range of possible outcomes and to highlight the variability in results.

We always work closely with our clients to identify the key risk drivers and potential dependencies underlying the performance of their insurance portfolios. Our understanding of the commercial drivers affecting our clients allows us to add value through our analysis and advice.

Premium Rating and Pricing

In a free and competitive rating regulatory environment, it is essential that insurers collect all statistical data so profitable rating structures can be designed. Accurate premium rating requires detailed analysis of data with the appropriate statistical techniques.

Across the EU, increasingly in the USA and UK, generalised linear models (GLMs) are being used for classes of business that have a large number of rating factors, such as motor insurance. GLMs show the true effect of rating factors, taking into account other correlated factors, and can be used to determine the risk factors that discriminate most effectively between good and bad risks. We are able to advise on the best rating structures and recommend appropriate risk and office premiums in order to enable our clients to meet specific profit objectives.

Solvency II

We can help companies on their preparation for the Solvency II requirements, including the calculation of their capital requirements, as well as advice on their ORSA (Own Risk and Solvency Assessment) report. This may include, if required, Dynamic Financial Analysis and/or development of specific internal models as well as advice on enterprise-wide risk management issues. We can also undertake responsibility of internal actuarial function and/or specific roles within that function.

Strategic Financial Planning

Our aim in working with our clients in financial risk management issues is to help them arrive at a greater understanding of the risks they face, to make informed decisions about the management of those risks and the economic capital that they must ultimately hold against the risks they face.

Dynamic Financial Analysis (DFA) is our principle technique, based on a stochastic simulation model which simulates companies’ financial conditions over a five year time horizon. The model can generate financial statements including balance sheets, income statements and various ratios. It can also capture and display expected values and distributions of any variable included in the model. A well parameterised DFA model can therefore help in a number of key strategic decisions like investment strategy, reinsurance strategy, business planning and valuing companies.

Mergers & Acquisitions

Successful merger and acquisition deals are those which enable one or both of the buyer and the seller to realise key strategic objectives and enhance shareholder value. Choosing the right deal to maximise value added requires detailed analysis of opportunities. Ensuring that the price paid is reasonable given the likely benefits and the potential risks of the acquisition are of paramount importance to any buyer. Consulting in these situations can involve the projection of future underwriting and investment earnings streams, company valuations for buyers or sellers, and the analysis of assets and liabilities. We can provide an independent advice at all stages of a merger or acquisition.