BENCHMARK FOR THE SELECTION OF AN ALM / SOLVENCY 2 MODELING TOOL
Background & challenges
The choice of tool, application package or development platform for ALM and Solvency 2 work has major implications, particularly in terms of cost, human requirements, working methods and objectives. Against this backdrop, our customer's ALM team was looking for support in benchmarking current solutions for ALM/Solvency 2 modeling.
The challenges of the project were as follows:
- An in-depth study of the various options available:
- Option 1: Maintain current software with possible upgrades to meet our customer's modeling challenges
- Option 2: Choice of a market tool
- Option 3: Development of an in-house modeling tool
- An analysis of the impacts and synergies for both the modeling actuaries and the IS and operational teams involved in the project, leading to a multi-dimensional study.
Solution provided
Our methodological approach was based on collaboration with our client's ALM team.
It was based on our operational expertise in this type of modeling tool, our experience in benchmarking and our experience in the governance of this type of project. Our approach enabled the customer to benefit from our knowledge of a large number of insurance and mutual groups.
The proposed system and the actions carried out were as follows:
- Development of the benchmark protocol, based on a proposal of analysis axes and comparison criteria;
- Drafting the benchmark questionnaire (based on the validated protocol) ;
- Sharing the questionnaire with publishers ;
- Gathering information based on our experience with various market players;
- Interviews with our modeling experts and associated tools;
- Formalizing exchanges and the various elements obtained;
- Analysis of the documentation collected on the selected tools
- Comparative analysis of responses ;
- Summary of the benchmark results and the positioning of the publishers consulted with regard to the various metrics analyzed, highlighting best practices and key lessons learned;
- Production of a detailed selection file for the launch of an RFP ;
- Presentation of summary to top management.
Customer benefits:
Our independent, objective approach, with no ties to the software vendors, enabled our customer to assess the advantages and disadvantages, prerequisites, possible limitations and operational changes in governance or management of each of the solutions considered according to the various criteria selected.
The benchmark enabled our customer to issue a call for tenders to the selected publishers, and to choose a tool that would enable it to meet its regulatory challenges (integration of S2 and IFRS17 regulatory changes and ACPR recommendations), strategic challenges (optimization of asset/liability management, ability to implement stochastic BEL models) and operational challenges (simplification of code, reinforcement of documentation, calculation time).
In a nutshell: an exhaustive, multi-criteria benchmark (over 100 points analyzed), assistance in making an informed decision, technical expertise from our specialist modeling consultants, time savings and security of choice for the customer, operational support for the remainder of the project.
Quanteam expertise makes the difference
- A thorough understanding of migration issues
- Mastery of the technologies and tools of the marketplace
- Proven experience in retirement savings modeling
- An integrated, multidisciplinary team
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