Santiago Restrepo
Partner, Actuarial
Our multi-disciplinary actuarial team incorporates qualified actuaries, data scientists and risk and capital experts. We provide clients with a wide spectrum of actuarial advice and support, incorporating advanced business practices, market-leading technology and state-of-the-art risk modelling techniques to deliver a range of powerful solutions and services.
By helping insurers understand the increasingly complex risks they face, our aim is to help clients develop strategic risk management insight and actions. Our detailed knowledge of the London market, corporate and captive insurance sectors enables us to provide you this valuable insight.
Our key services include:
- Actuarial reserve reviews
- Capital modelling and risk management
- Capital evaluation under Solvency II
- Internal model validation
- Reserving and pricing
- Statement of Actuarial opinion
- Re-insurance design and optimisation
- Commutation
- Due diligence
- Restructuring, sale and purchase
- Company start-up and authorisation
- Expert reporting
Actuarial reserve reviews
Reserve review is part of our 'business as usual' process with many clients. We can provide one-off reviews for normal year-end work, cross checks on the work of others or due diligence for Standard and Poors (S&P). We act as the actuarial function holder for a number of smaller clients and advise a wide range of clients in diverse markets on reserving matters.
The science behind establishing the best estimates has developed under Solvency II but we have always held to the simple principle of measurement; namely that no measurement is complete without some understanding of the uncertainty of the estimate. We have broad experience in carrying out estimates for many different loss phenomena and lines of business, both live and run-off.
Capital modelling and risk management
To ensure financial soundness of the business and fulfil regulatory requirements, insurers need to align the amount of capital they hold closely to the specific risks they face. Compliance and capital adequacy are affected by premium income and rates, claims, expenses, investment performance and a number of other factors. Our expert judgement combined with meaningful analysis of the historic experience of the business allows for a deeper understanding of exactly what makes the business tick, which areas are a cause for concern, and which need to be modified to ensure a company’s continued success.
Our models are flexible, easy to use and closely reflect our clients’ business and the outlook for the future. We have many years’ experience in helping insurers to assess the adequacy of capital resources and help determine the optimal amount of capital needed to both satisfy regulators and achieve business ambitions.
Capital evaluation under Solvency II
Regulatory capital requirements are all moving towards a risk-based approach. Solvency II has led the change and is now largely embedded as part of 'business as usual' in the UK and the EU.
Whilst the 'business as usual' process is established, implementation remains complex, time consuming and susceptible to alternative interpretation. All of which can materially affect the Solvency Capital Requirement.
Our team are experienced in implementing Solvency II accounting principles, Standard Formula calculations and completion of the full suite of regulatory reporting from Pillar 1 to Pillar 3, the SFCR and all other aspects in between. We have implemented full internal models, partial internal models, modified undertaking specific parameters (USPs) and quantified capital add-ons as prescribed by regulators.
We will implement, maintain and document USP, partial or full internal models, guiding the model approval process and helping clients meet the reporting requirements.
Solvency II, as part of its governance requirements under Pillar II, requires companies to perform an ORSA (Own Risk of Solvency Assessment) annually at a minimum. Companies are required to set out their view of risks affecting the business, control and governance structures in place and provide an evaluation of the economic capital requirements over their business planning horizon. We have experience in building ORSA models and assisting clients with their wider ORSA process and documentation.
Other services we provide include:
- Design and provision of risk management information
- Review and development of risk appetite frameworks
- Design and implementation of target operating model solutions
- Review current risk management IT systems architecture and data flows
Internal model validation
Our Actuarial team has extensive experience in internal model (IM) build, documentation, implementation and maintenance. We have performed validation reviews on a range of IMs, both at Lloyd’s and the company market in the UK and the EU.
We have experience in implementing full IMs, partial IMs and other modifications to the Standard Formula SCR, including evaluation of capital add-ons for regulatory purposes.
Our approach is systematic and straightforward, targeted at meeting the regulatory requirements with a view to providing valuable insights with minimal disruption and maximum efficiency.
Reserving and pricing
Our team can provide an in-depth analysis of claims history and a projection of expected experience for use in setting IBNR figures.
We also provide services for the development of product pricing models and determining appropriate premium levels.
Statement of actuarial opinion
Lloyd’s syndicates require a statement of actuarial opinion (SAO) to the effect that the carried reserves are demonstrably prudent. Delivery of the SAO may be internal or via an external adviser.
Our team has the skills, experience and qualified staff to provide syndicate SAOs. Our experienced practitioners have the resources available to support the signing actuary, and they ensure that our knowledge base is consistently diverse, accurate and well-informed.
Our approach is systematic and efficient. We would normally anticipate an early cut-off view of the syndicate data with an initial independent valuation model build to highlight material and unusual factors, and to ensure that the final closing is handled promptly and with clarity.
Reinsurance design and optimisation
Aside from claim payments, reinsurance purchase is often an insurer’s single largest business expense, and in many cases it is also an insurer’s largest asset category.
We support businesses in ensuring that reinsurance purchase is as smooth and efficient as possible, therefore a detailed focus on the behaviour of a prospective reinsurance programme really makes a difference. Similarly small changes to the management approach to an existing reinsurance programme will often speed up cash flow, provide the possibility of hedging-out counterparty credit risk and generally fine-tune the performance of the asset class.
Commutation
There are many aspects to a commutation deal, ranging from an in-depth technical evaluation of loss experience and contractual exposures, to the psychology of a horse trade. Often the form of a financial transaction significantly affects the reception which a commutation deal will receive from supporting counterparties (such as reinsurers).
Poorly structured commutations whose scope includes the settlement of contingent (IBNR) claims are likely to damage a cedent’s ability to collect reinsurance.
Our range of experience in the field is diverse covering multiple lines of business, territories and contractual arrangements.
Due diligence
Our Actuarial team acts for buyers and sellers of many enterprises in the insurance space. Our actuaries have supported clients on many due diligence reviews, both for underwriting businesses, brokers and managing general agents (MGAs).
Restructuring, sale and purchase
Our expertise in reserving, pricing and financial modelling coupled with experience at a senior level in industry means our clients have confidence in our ability to integrate complex financial information efficiently, and to present the key facts clearly and in a timely fashion.
We have acted on many occasions for clients seeking to acquire books of business or entire companies.
In many cases Part VII transfers form part of an entity's reorganisation plans and we have been central to these processes.
Company start-up and authorisation
We understand the critical importance of supporting new companies with their business application and technical support in the early establishment stages.
We have assisted in the establishment of a number of new start-ups, providing capital modelling, financial planning and related risk management advice. This has included liaising with regulators in various jurisdictions on numerous occasions.
Expert reporting
We have provided various actuarial services on solvent schemes of arrangement, including acting as scheme actuary, as independent vote valuer and in various advisory roles, both on behalf of scheme proponents and scheme creditors.
Having acted as an independent expert across numerous Part VII transfer schemes, we can provide support and critical analysis on a range of cases and concerns.
