Challenge

A client engaged Milliman for a long-standing project to provide an annual independent review of reserves on a GAAP and Solvency II basis. The engagement involved a complex portfolio with multiple delegated underwriting arrangements, creating challenges around data consistency, transparency and interpretation across different stakeholders. Over time, the evolving nature of the portfolio added further complexity to maintaining a robust and efficient review process.

Approach

Structured review and stakeholder engagement: Milliman established a clear annual review framework, which included agreement on timelines, deliverables and governance with the client. Regular touchpoints with actuarial, finance and risk teams ensured alignment, transparency of findings and timely escalation of key reserving issues.

Independent validation and challenge: We performed a detailed independent assessment of reserves and technical provisions, reviewing methodologies, assumptions and expert judgements. This included a targeted challenge of key areas of uncertainty, ensuring that the selected approaches remained appropriate for the insurer’s evolving risk profile.

Response to emerging experience and inflation: Milliman supported the client in refining their reserving approach to reflect external pressures, such as inflation spikes, as well as internal changes in claims development driven by evolving claims handling processes. We provided practical recommendations on assumption setting and scenario analysis to enhance resilience under different economic conditions.

Process review and continuous improvement: Alongside a technical review, we assessed the effectiveness of the client’s reserving processes and controls. We identified opportunities to improve consistency, documentation and governance, helping to strengthen the overall robustness and auditability of the reserving framework.

Impact

Enhanced stakeholder confidence: Milliman delivered a comprehensive independent report to the client’s board and external auditors, providing clear validation of the reserving approach and strengthening confidence in the level of the reserve and technical provisions held.

Robustness under uncertainty: Our review and recommendations helped ensure the reserving framework remained appropriate in the face of inflationary pressures and evolving claims experience, supporting more resilient decision-making.

Improved governance and transparency: The engagement enhanced the clarity and documentation of key assumptions and methodologies, enabling more effective communication with stakeholders and supporting audit readiness.

Insights for ongoing improvement: The client was equipped with practical recommendations to refine methodologies and respond proactively to emerging trends, positioning the actuarial function to maintain high-quality reserving practices over time.