The challenge

Running interfaces back and forth between SAS, Excel, and R on a partial internal model meant more than 40 hours of computing time before every regulatory deadline. Stressful? Yes. Efficient? No. With more than 10,000 calculations necessary to assess solvency, the multi-platform model run by this non-life insurer was not only cumbersome but also subject to errors. Modeling required additional manual steps from actuaries to detect inaccuracies and correct them.

Milliman’s client was clear about its needs going forward:

• Proper tools and workflows to ensure data security
• A single solution to compute all financial results - including the solvency capital requirement under the firm’s internal model and projections for the own risk and solvency assessment
• The ability to perform complicated, specialized modeling with access to the underlying formula
• Reduced calculation times
• Transparency and ease of use

If you’re like other general insurers in this situation, you might have thoughts like:

“There is no way to audit Excel and see when the last change was made to the model, who made it, and why.”

“Staying on top of solvency assessments for regulators and internal review is extremely taxing on our time and resources.”

“I worry that our models contain errors that might go undetected before our deadline.”

The approach

Milliman Mind is designed to help general insurers address own risk and solvency assessment challenges by the following objectives:

Simplify implementation process

Build a program that is easy to implement using current Excel models

Improve audit trail

Create a platform that lets users track changes to the model, reducing risk for error and creating transparency in reporting.

Segregate data from the model

Develop a robust program that, unlike Excel, clearly segregates the model from the data to keep both structures intact, regardless of scale.

Build on-demand computing capacity

Instead of dreading the next deadline, adopt a cloud-based system that has the power to run many iterations of the model as often as needed—daily, if necessary.

The solution

Milliman Mind was the solution this non-life insurer was looking for. Unlike other programs, Milliman Mind does not require a long implementation on a new platform. By building the model in a fraction of the time it would take with other solutions, the general insurer saved money and actuaries were soon directing attention toward high-level decisions instead of reviewing models and reports. The best part? The client reports that Milliman Mind now computes 40 times faster than its previous solution.

To begin the process, Milliman Mind offered a free add-in application so that Excel could handle R functions. SAS data was recoded in Milliman Mind, which uses C# and works seamlessly with Excel. With cloud-scale power and thoughtful planning, the complex SAS/R/Excel framework translated into a single, seamless Milliman Mind project. The modeling run time was reduced from more than 40 hours to just 30 minutes, with one push of a button.

Milliman Mind now enables the general insurer to prove it needs less capital than the standard formula. Not only is the insurer saving capital by running on an internal model with Milliman Mind, but it is also doing it with confidence and transparency.

Learn more about what Milliman Mind can do for you, here.