Actuarial

Actuarial Consulting is a core service offering at NMG, where the quality and timeliness of our reserving and valuation work are widely recognised throughout Asia. NMG has been performing actuarial work for almost two decades and as a testament to the quality of the work performed, has repeat customers and relationships stretching back to the very beginning.

NMG has a broad range of specialist actuarial skills to assist organisations with the complex challenges they face in increasingly sophisticated and competitive markets.

We have expertise in the areas of General Insurance, Health Insurance, Employee Benefits and Life Insurance for conventional (re)insurance and (re)takaful operators. Our actuarial services are often linked with strategic planning and distribution consulting as part of our integrated consulting proposition.

Globally we employ more than a dozen qualified actuaries in a variety of fields that we can readily access as the need arises.

Liability Valuation

We regularly assist clients throughout Asia in determining appropriate reserving levels for insurance policy liabilities (eg IBNR, URR) for statutory and management information purposes. In performing our reserving exercises we identify the key drivers of the operations and provide insight on how the business is performing.
We have expertise in performing:

Central Estimate and Stochastic reserving under RBC and non-RBC frameworks across retail, commercial and reinsurance lines
Peer review of internal analysis for reporting to Board or Regulator. This ensures that the internal analysis performed conforms to generally accepted actuarial best practices and leverages on our exposure to relevant market trends.

Product Development & Premium Rating

We believe that it is of critical importance that individual companies understand the true cost (technical price) of the risks being underwritten, regardless of whether the insurer operates under industry-wide tariffs or in a free market.

The result of any premium rating exercise should ultimately provide appropriate tools to underwriters that allow them to determine the technical price for an individual risk as well being able to respond to competitive pressure in the market-place. By knowing when to compete in a ‘price-war’ and what risks are unpopular but profitable, individual companies are able to enhance their bottom line.

We assist our clients by providing:

Capital based approaches to loss ratio targets and the pure claims costs estimates
Advanced pricing techniques including rating factor determination and GLM
Knowledge of local market trends and issues

Capital Management & Risk Based Capital (RBC)

Capital is expensive and needs to be utilised strategically and efficiently, especially under the current economic uncertainty. Within an RBC framework, insurance and reinsurance companies need to consider capital required and the returns being generated from each line of business. As such, the process requires independent capital assessment for each line of business on a stand-alone basis.

With the increasing popularity of Risk Based Capital frameworks in many jurisdictions, capital management has become increasingly important to insurers and reinsurers.

Modelling techniques such as Dynamic Financial Analysis can be effectively applied to quantify and understand this risk/return relationship for the following tasks:

Overall capital requirements under an RBC framework
Determining optimal capital requirements
Allocation of capital between segments and review of segment performance
Formulating investment and asset allocation strategies
Determination of capital efficient reinsurance programmes.

Reinsurance Review & Optimisation

We can assist a company by providing an independent perspective on the overall reinsurance programme. By undertaking a thorough review of all the reinsurance arrangements, we can help to ensure an optimal programme is in place by relating the limits and deductibles in place back to the risk profile of the company.

With increased focus on capital management, the role of reinsurance becomes more important. A Loss Portfolio Transfer (LPT) policy provides immediate capital relief, however, is difficult to complete as it requires a detailed understanding of the product and an alignment of expectations of the insurer and reinsurer.

Our consultants are experienced in the mechanics of this type of reinsurance arrangement, having facilitated the placement of the LPT in Malaysia in 2010.

Appraisal Value Assessment & M&A

NMG is experienced in all aspects of company valuation work from preliminary feasibility for mergers and acquisition related studies to complete valuations of assets and liabilities for life and non-life insurers. We possess an in-depth knowledge of the local markets we operate in and our extensive network of contacts has often allowed us to bring buyers and sellers together.

Business Review, Stress Testing & Training

Business Review

An external actuarial review provides a business with certain crucial internal insights that it would find difficult to generate from within. These insights can result in considerable cost savings and increased profitability, hence creating value.

Stress Testing

NMG is able to provide Stress and Scenario testing either for regulatory or internal management purposes, including support of regulatory stress testing exercises, capital modelling, target pricing and business planning.

Training

NMG can provide in-house training for company executives or through NMG’s Actuarial Training Programme. Past topics include:

Liability valuation techniques
Pricing and risk segmentation
Capital management and Return on Equity analysis.