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Actuarial Modelling and Independent Pricing

Our well-governed modelling systems give you accurate insights and predictions, helping you to plan for future cashflow needs and sharpening your competitive edge.

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Benefits Modelling

From employee benefit cashflow to cancer modelling and income protection, our well-governed modelling systems give you accurate insights and predictions, helping you to plan for future cashflow needs and sharpening your competitive edge.

Our team of actuarial experts help clients to predict claims costs and anticipate the impact of improving cancer survival or life expectancy rates through valuation, projection, alternative design modelling and sophisticated Monte Carlo volatility analysis. This level of independent analysis and pricing capability is invaluable from a client due diligence perspective both for self-funded and insured arrangements (allowing insurer pricing negotiation from a position of strength).

Cash flow modelling for health and risk benefits

Even in the world’s largest multinationals, cash – and the ability to predict future cashflow – is king.

Our specialist actuarial and financial modelling team provides support to clients across the UK, Africa, Europe and the Bahamas.  We help clients to understand the financial risks of benefit provision and what the longer term spend might look like through valuation, projection and alternative design modelling.

We can model long term PMI, life insurance and income protection benefit costs over periods of up to 50 years.  Results are illustrated with easy-to-understand charts and diagrams.

Most of our clients need accounting disclosures for post-retirement medical plans but we can also support in many other areas of data analysis and modelling which underpin propositions across healthcare and risk benefit consultancy.

By changing key parameters such as workforce demographics, we can predict what the impact on benefit cost might be over long-term horizons.  We can also test the potential cost impact of different benefit plan design strategies over time.

This is crucial information for organisations looking to maximise budget clarity and future-proof themselves from unexpected premium inflation and is especially pertinent to those looking to self-insure.

Group life and income protection: modelling and independent pricing

It’s important to know that you are still paying a fair and reasonable price for your group life and income protection policies, particularly if you have been with the same insurer for some time.

Our actuarial proposition allows us to independently price group life and income protection plans thereby facilitating insurer negotiations from a position of strength. We also assist clients with captive arrangements providing third-party pricing support to monitor the accuracy of the captives pricing.

We can also model and illustrate the potential impact of any changes to benefit plan design, such as the introduction of a limited income protection term (e.g. 5 years and a lump sum payment instead of payment all the way to retirement age).

We use sophisticated Monte Carlo volatility analysis to simulate next year claims costs based on predicted death rates and illustrate the risk exposure with predicted confidence levels (e.g. the annual claims bill is most likely to be £5m but there is a 10% chance that it might be £50m).

The analysis is also useful for clients considering a move to self-finance their benefit provision.

Dependents’ death in service pension modelling

Dependents’ death in service pensions, which pay a percentage of an employee’s final salary to their dependents until their death, can create a significant financial drain on companies.

We can advise on the creation of an alternative one-off lump sum payment offer (in lieu of a monthly pension) and help in establishing what represents a fair payment to both sides. We do this by calculating the true lifetime value of the pension in terms of salary multiple to create a benchmark against which to measure any potential design change.

This ‘benefit neutral’ approach allows you to demonstrate due diligence when consulting with employees and can also help to win the consent of Trustees.

As market conditions are constantly evolving, regular reviews can also ensure the payment levels remain fair and fit for purpose.

Post-retirement medical benefits

Post-retirement medical benefit schemes were a popular benefit in the 1970s and 80s but have since fallen out of favour due to their rising cost base. As more people live longer and survive critical illnesses thanks to expensive new drugs, so medical costs and premiums have been on the steady increase.

If you still run any such schemes, you will need to disclose their cost each year in your organisation’s accounts.

As well as providing annual accounting disclosures, we can also advise on the key factors you need to consider when estimating the future cost of post-retirement medical benefits such as long term medical cost escalation, the impact of ageing on medical costs and life expectancy.

We can also help you to mitigate long-term costs by advising on:

  • buy-out: how to get the best buy out terms for the scheme from the wider insurance market
  • settlement: how to negotiate an attractive lump sum exit settlement offer
  • plan design change: how to enhance long term scheme sustainability through subtle changes in benefit provision.

Cancer and condition specific modelling

The past decade has witnessed significant improvements in the ability of the medical profession to treat cancer successfully and cancer survival rates are now at an all time high due to earlier detection and more advanced therapy.

As the latest treatments and drugs, especially those based on monoclonal antibodies, are very expensive, insurers are offering lots of different levels of cover for cancer.

We can help you navigate the complex pathways to supporting scheme members with cancer.  Tools such as our Cancer Modeller will project future benefit costs around monoclonal antibody/cancer drug treatment to help you to make informed, measured decisions.

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