Challenge

The client required an independent annual actuarial report for their board covering underwriting processes and performance. This was made more complex by the reliance on a delegated underwriting model through a specialist MGA, requiring clear understanding of pricing governance, oversight and performance across multiple parties. Additionally, evolving market conditions—such as inflationary pressures and regulatory expectations around fair value—created further challenges in ensuring pricing approaches remained appropriate and well-controlled.

Approach

Structured annual review process: Milliman established a consistent framework for the annual review, engaging with key stakeholders across pricing and underwriting to ensure a comprehensive understanding of processes and outputs.

Assessment of pricing governance and methodology: We reviewed documentation provided by the pricing team to assess the robustness of pricing processes, controls and governance. This included evaluating how pricing decisions were made, implemented and monitored.

Independent challenge on market developments: Milliman engaged directly with the pricing team to challenge and validate their approach to key market issues, including inflation, fair value considerations and ongoing pricing developments.

Performance and profitability analysis: We assessed underwriting performance through detailed analysis of financial results across segments, complemented by insights from reserving models to evaluate the consistency and sustainability of performance.

Impact

Increased board confidence: The client received a clear, independent view of underwriting performance and pricing governance, supporting informed decision-making at the board level.

Stronger oversight of delegated underwriting: The review provided greater transparency over the MGA’s activities, helping the client strengthen oversight and ensure alignment with their risk appetite.

Improved response to market conditions: Our challenge and insights supported the client in refining their approach to inflation, fair value and pricing changes, ensuring these were appropriately reflected in underwriting strategy.