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Internal Model Validation
Provide subject matter expertise in market risks, insurance risks, credit risks, matching adjustment and methodology aspects such as proxy modelling.
The Project
In 2020, Brighter was engaged by a large UK monoline annuity writer for the internal model validation as part of its SII internal model application. We were able to provide subject matter expertise in market risks, insurance risks, credit risks, matching adjustment and methodology aspects such as proxy modelling.
The Solution
As part of this project, we are involved in the following key activities:
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Providing subject matter expertise and key insights into best practices.
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Stakeholder management on key aspects of the risks and reports.
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Building of model policies, validation framework and comprehensive validation reports.
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Training of the BAU team to make them self-sufficient.
The Results
Smart Sourcing
For all phases of the project, relevant experts were sourced from our extensive network on a needs-only basis. This solution was significantly cheaper than hiring many full-time experts (or consultancies) to provide advice on individual areas.
Time Saving
The recommendations made by our team have helped in significantly improving the risk model and reduced time taken for model approval by the regulator. Best quality output to the client was provided in a timely manner, even with some of the deadlines being brought forward during the project.
Increased Profits
The improved risk model has been utilised by the client in realising an optimised solvency position and increasing their ability to write new business on a more profitable basis. The client is continuing to utilise advice from our experts on a flexible and cost-effective basis and this arrangement can be scaled up or down as the requirements evolve.