The internal model application was ultimately accepted by the regulator, allowing the firm to make use of their own model to calculate the Solvency Capital Requirement and support business decision-making.
Crowe independently reviewed both the internal model in question and the application being made to the regulator, and agreed improvements with the organisation that would support a successful application process.
The review concluded that the model itself was technically robust, being used for business decisions, and it satisfied all the relevant requirements of Solvency II. Crowe made a range of recommendations based on regulator feedback, key stakeholder interviews, and a review of the model governance processes. Our recommendations were scored in terms of 'effort' and 'impact. This allowed the organisation to focus resources on quick win activities within the right timescales, before the next application.
An overseas regulator had previouslty rejected three internal model applications from an insurer. Crowe were appointed to support the insurer's fourth application and ensure success.
Solution
Issue
Outcome
Internal model application support
Crowe's assistance ensured the internal model application was successful.
Case study
How we have helped our clients
Crowe saved the client a minimum of $6,000 in year one alone and enabled the client to legally hire their own employees in the UK.
We advised to register the US company as a non resident employer in the UK and operate monthly payroll for the two employees for an annual total of $3,000. In addition, we were able to establish and operate the mandatory local pension plan and obtain small group health insurance cover (not mandatory) for an additional $3,000.
Having spoken to a number of employer of record companies and the annual fees ranged from $12,000 to 15% of total compensation ($45,000 per year). They were uncomfortable with the idea that these two key hires were going to be employed by a third-party but would be carrying US Company business cards, holding themselves out as employees of the US Company and could potentially create both employment and tax liabilities for the US Company.
Solution
Issue
Outcome
A holistic approach to cost reduction, identifying and eliminating inefficiencies across various back-office functions.
Our client wanted to hire two sales people in the UK but they were not ready to commit to establish a permanent local presence. They wanted to treat these hires as employees, providing stock options and local benefits.
Case study
How we have helped our clients
The model Crowe developed allowed a more refined targeting of customers who are likely to buy. Of a sample of the 100 customers who were identified as most likely to purchase an annuity from the previous month, the sales team was able to increase sales by 30 times the amount previously seen. The modelling has also enabled the insurer to improve the customer experience by pre-empting their requirements and indentifying stages of the quotation process at which customers drop out.
Crowe developed a supervised learning model to identify dimensions within the insurer's data that were predictive of the propensity to buy an annuity. This went beyond typical measures already used by the sales team including time of day and day of the wek that a quotation was requested, the browser used to access the portal, as well as ruling out dead-ends by using IP address matching to identify quotations that were likely driven by benchmarking exercises conducted by consultancies.
An insurer selling annuities through an online portal wanted to increase their conversion rate. The client requested Crowe to conduct a proof of concept exercise for using machine learning to identify likely sales targets.
Solution
Issue
Outcome
ML assessment of propensity to buy
Crowe's modelling showed how machine learning to tools could be combined with human expertise to improve the customer experience.
Case study
How we have helped our clients
Crowe's review gave the Trustees comfort that members' benefits are being calculated accurately and that solvency projections for the scheme as a whole are materially accurate.
Crowe conducted in-person fieldwork at the Scheme's actuary's office, consiting of a workflow of the model from both a user-perspective and an actuarial-perspective. This allowed Crowe's actuaries to interrogate both the user's view of the model, and the underlyin actuarial calculations. Crowe has developed a proxy valuation model and used this to replicate the main functionality of the client's custom model to revalue a sample of calculations and ensure members' benefits were being calculated accurately.
A large pension scheme had requested their scheme actuary to develop a custom actuarial model for the purpose of allowing their administration team to calculate retirement benefits and transfer values for its members. The model was developed and implemented in 2019, and the Trustees of the scheme required independent validation of the accuracy of the model.
Solution
Issue
Outcome
In-depth review of actuarial modelling
Crowe's in-house actuarial model validated that members' benefits were being calculated accurately.
Case study
How we have helped our clients
The internal model application was ultimately accepted by the regulator, allowing the firm to make use of their own model to calculate the Solvency Capital Requirement and support business decision-making.
Crowe independently reviewed both the internal model in question and the application being made to the regulator, and agreed improvements with the organisation that would support a successful application process.
The review concluded that the model itself was technically robust, being used for business decisions, and it satisfied all the relevant requirements of Solvency II. Crowe made a range of recommendations based on regulator feedback, key stakeholder interviews, and a review of the model governance processes. Our recommendations were scored in terms of 'effort' and 'impact. This allowed the organisation to focus resources on quick win activities within the right timescales, before the next application.
An overseas regulator had previouslty rejected three internal model applications from an insurer. Crowe were appointed to support the insurer's fourth application and ensure success.
Solution
Issue
Outcome
Internal model application support
Crowe's assistance ensured the internal model application was successful.
Case study
How we have helped our clients