PRO Insurance Solutions

Run-off Solutions Modelling

It is vital for companies to be proactive when dealing with discontinued liabilities. This is particularly true in a business environment characterised by demanding shareholders, increasing regulatory requirements and influential rating agencies.

Our focus at PRO is on achieving finality for our clients’ discontinued liabilities - we aim to achieve closure of portfolios and where possible allow the release of surplus capital. Our experienced team has a range of techniques at its disposal to achieve finality. They include accelerated run-off, reinsurance solutions, Solvent Schemes of Arrangement, Part VII Transfer and sale of company.

Choosing the right technique can have a significant impact on the level of capital returned to shareholders, and the timing of such release; we can advise our clients on which is the best solution for their portfolio. To help in the decision-making process, our modelling of various strategies gives a clear picture of the potential outcomes from each closure solution.

Our broad range of expertise means we are well-equipped to deliver a solution for all types and sizes of portfolio. Our service is further enhanced by our ability, where necessary, to match clients’ requirements with capital from a selection of partner companies.

How we work

Whenever a finality solution is sought, we start by carrying out due diligence on the client’s portfolio. Our investigation will focus upon:

• Insurance liabilities – classes of business, parental guarantees, actuarial estimations and natural tail of liabilities
• Other liabilities – such as premises and staff, including pension contributions
• Reinsurance assets – reinsurer security, bad debt provisions and overall reinsurer credit risk
• Other assets – liquidity of investments, property and taxation provisions

We will then consider the type of solution that might fit the client’s portfolio and will go on to produce several models of the potential outcomes. By using various scenarios, we are able to ‘stress test’ the solution against the specific situation.

With the options now more clearly defined, we will recommend the solutions that represent the best return of capital to shareholders. We do not provide actuarial forecasting services – instead, we base our advice on existing company’s projections or independent actuarial firm estimates. Each model we present will set out the estimated timescales, resource levels and costs for the associated solution which can be used as a road map for the client to implement their closure solution.

Fees

Our fee structure varies according to the needs of our clients. Generally we operate on a competitive hourly rate, with budgets based on the scope of each project and the time and resources it will require. We can also link remuneration to the result of a project by agreeing payment against the completion of benchmarks set in advance.

Our Team

For each project we assemble a dedicated team combining the experience of specialists from a range of disciplines. Our clients benefit from a wealth of expertise in the area of run-off, our working knowledge of finality solutions and the application of advanced modelling techniques.