IASB names Milliman’s William Hines to Transition Resource Group for IFRS 17

Milliman is pleased to announce that Principal William Hines has been named an observer to the International Accounting Standards Board (IASB) IFRS 17 Transition Resource Group (TRG). IFRS 17, which was adopted in May, represents a significant change from current accounting practices and is expected to require substantial effort from companies to comply. Hines is one of only three observers and fifteen members that make up the TRG; the group was created to help support companies as they transition to the new Standard.

Hines was appointed an observer from the International Actuarial Association (IAA) where he chairs the Insurance Accounting Committee. He has spent the past 15 years actively involved in the insurance project, presenting research to the IASB’s Insurance Working Group, and to IASB members and staff. During the IFRS 17 development process, Hines was part of the American Academy of Actuaries (AAA) IFRS Task Force and Financial Reporting Committee that provided input to the Board. He has been invited to speak at conferences around the world, and has published extensively on the topic of IFRS accounting for insurance.

William has extensive experience consulting, researching, writing, and presenting on IFRS 17. There are not many people who can say they’re passionate about financial reporting issues for insurers – but William is one such person. I’ve no doubt his expertise will be invaluable to the Transition Resource Group and the firms it supports as we make the significant transition to IFRS 17.

For more information on the appointment, click here.

Price optimisation for personal lines insurance in Ireland

Price optimisation is a powerful and often controversial technique that blends traditional risk cost modelling and an understanding of behavioural considerations such as price sensitivity to predict the “optimal” combination of premiums charged and expected profit. In this article, Milliman’s Eoin Ó Baoighill and Anita Subramani discuss price optimisation and its use for personal lines insurance in Ireland.

Extension of the Senior Managers and Certification Regime to insurers

In the United Kingdom, the Prudential Regulation Authority and the Financial Conduct Authority recently issued two complementary Consultation Papers, setting out their proposals to extend the Senior Managers & Certification Regime, which currently applies to the banking sector, to insurers. This article by Milliman consultants provides an extended summary of the proposed changes that will apply to Solvency II insurers, Insurance Special Purpose Vehicles and large Non-Directive Firms.

MicroInsurance Centre to join Milliman

Milliman has announced that the firm has been joined by the MicroInsurance Centre (MIC), the internationally recognized consulting firm and microinsurance thought leader dedicated to generating access to valuable microinsurance products to 3 billion low-income people across the globe. Both firms share the common goal of working to protect the health and financial well-being of people everywhere. The transaction amplifies and accelerates the MIC’s progress towards its goals while significantly expanding Milliman’s capabilities in microinsurance. Together, these companies provide unmatched breadth and depth in capacity for clients working in emerging markets to start or enhance their insurance offerings in the low-income market segments.

“The MicroInsurance Centre is a remarkable organization with a deep commitment to building sustainable microinsurance products for populations in need,” says Milliman Chief Executive Officer Steve White. “The MIC’s pedigree of deep expertise, its independence, and its ability to deliver research and education around microinsurance pair perfectly with Milliman’s values and global footprint. We look forward to working with the MIC in support of its bold vision.”

“Milliman is a perfect fit for us given its mission, skills, and great reputation. Milliman’s interest in helping its clients expand throughout the emerging markets, where the bulk of insurance growth will arise, was an obvious fit as we looked to expand our vision of keeping people from sliding back into poverty,” says MIC president Michael J. McCord. “The synergy arises from Milliman’s global reach and commitment to the health and financial well-being of people everywhere, coupled with the MIC’s experience in providing value to low-income clients and business cases for insurers in over 75 countries.”

For more information, click here.

New smartphone-based driving risk score detects drivers that are 13 times more likely to crash

Milliman has announced a new innovation in the InsurTech space – a driving “risk score” created with tech start-up Zendrive that is up to six times more powerful than the leading predictive models.

Milliman teamed up with Zendrive, a smartphone-powered driving analytics company, to study how distracted driving and other driving behaviors can lead to auto collisions. Using Zendrive data, Milliman verified the behaviors that were strong indicators of collision frequency and created a risk score to compare the “worst” drivers relative to the “best.” Their findings revealed that the worst 10% of drivers were over 13 times more likely to be involved in a crash than the best 10% of drivers. The results were based on one of – if not the – largest telematics data set in the U.S. As of today, Zendrive has captured over 40 billion miles of driving behavior via smartphone sensors.

Smartphones can measure driving behaviors that traditional, first-generation telematics can’t, such as who is driving the vehicle and phone usage contributing to distracted driving. These new-age predictors contributed to a risk score that is over six times more accurate than the current industry leader models, which use traditional hardware-based telematics devices. There’s an opportunity here for auto insurers, especially commercial auto fleet insurers, to be early-adopters of this technology, and improve their ability to measure and rate risk.

To read more about the study, click here. Also, to read more about Milliman’s InsurTech research, click here.

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