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The Times of London: Why your risk team needs to become your insight function

Business today moves at lightning pace, and this rapid pace of change is leading to an evolution in risk management. In a recent article in The Times of London, “Why your risk team needs to become your insight function,” Milliman consultant Neil Cantle writes that traditional forms of risk management are quickly becoming too slow to anticipate or enable meaningful reaction. More and more, writes Cantle, companies are embedding new technology and automation into their risk management processes, and risk teams are evolving to help businesses embed risk-thinking into their daily activities. The full article can be accessed via the link above. For more information on Milliman’s work in enterprise risk management, click here.

Top 10 worldwide Milliman publications of 2014

In 2014, Milliman published a range of articles and videos, covering issues including retirement ideas for Millennials, the pros and cons of catastrophe models, the value of enterprise risk management (ERM) programs, and the impact of the Patient Protection and Affordable Care Act (ACA) on financial statements. We also published on challenges related to healthcare costs and insurance and risk management issues—and about real insurance for fantasy football and insurance for ride sharing. To view this year’s 10 most viewed articles and reports, click here.

Top Milliman blog posts in 2014

Milliman consultants had another prolific publishing year in 2014, with blog topics ranging from healthcare reform to HATFA. As 2014 comes to a close, we’ve highlighted Milliman’s top 20 blogs for 2014 based on total page views.

20. Mike Williams and Stephanie Noonan’s blog, “Four things employers should know when evaluating private health exchanges,” can help employers determine whether a PHE makes sense for them.

19. Kevin Skow discusses savings tools that can help employees prepare for retirement in his blog “Retirement readiness: How long will you live in retirement? Want to bet on it?

18. The Benefits Alert entitled “Revised mortality assumptions issued for pension plans,” published by Milliman’s Employee Benefit Research Group, provides pension plan sponsors actuarial perspective on the Society of Actuaries’ revised mortality tables.

17. In her blog, “PBGC variable rate premium: Should plans make the switch?,” Milliman’s Maria Moliterno provides examples of how consultants can estimate variable rate premiums using either the standard premium funding target or the alternative premium funding target for 2014 and 2015 plan years.

16. Milliman’s infographic “The boomerang generation’s retirement planning” features 12 tips Millennials should consider when developing their retirement strategy.

15. “Young uninsureds ask, ‘Do I feel lucky?’” examines the dilemma young consumers face when deciding to purchase insurance on the health exchange or go uninsured.

14. Last year’s #1 blog, “Retiring early under ACA: An unexpected outcome for employers?,” is still going strong. The blog authored by Jeff Bradley discusses the impact that the Patient Protection and Affordable Care Act could have on early retirees.

13. Genny Sedgwick’s “Fee leveling in DC plans: Disclosure is just the beginning” blog also made our list for the second consecutive year. Genny explains how different fee assessment methodologies, when used with a strategy to normalize revenue sharing among participant accounts, can significantly modify the impact of plan fees in participant accounts.

12. Doug Conkel discusses how the Supreme Court’s decision to rule on Tibble vs. Edison may impact defined contribution plans in his blog “Tibble vs. Edison: What will it mean for plan sponsors and fiduciaries?

11. In her blog “Retirement plan leakage and retirement readiness,” Kara Tedesco discusses some problems created by the outflow of retirement savings. She also provides perspective on how employers can help employees keep money in their plans.

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Milliman’s top 10 publications of 2013

In 2013, Milliman again published a wide variety of articles and videos, including timely analysis related to issues such as sinkhole peril, improving claims analytics through text mining, predictive modeling and analytics, and Solvency II developments. In addition, we published extensively on ongoing challenges related to managing healthcare costs, healthcare reform, retirement planning, and insurance and risk management issues.

Here are this year’s ten most viewed articles and reports:

10. Fees: What everyone is NOT talking about!
By Douglas A. Conkel

How do plan sponsors ensure that actual fees paid by each participant are fair and reasonable when compared to other participants within the plan?

9. Planning for NAIC ORSA
By Chris Suchar, Joy A. Schwartzman, Matthew G. Killough, Wayne E. Blackburn

Sophisticated risk assessment will be key to complying with U.S. ORSA requirements.

8. Operational risk modelling framework
By Joshua Corrigan, Paola Luraschi

Current methods and emerging practices in operational risk across the world.

7. ACA: An act of unknown consequences for workers compensation
By Derek A. Jones

How will healthcare reform mandates for preexisting condition coverage and broader healthcare access affect workers’ compensation claims and costs?

6. President Obama’s transitional policy for canceled plans
By Hans K. Leida

The November 14, 2013 announcement that health insurance issuers would be permitted to renew certain canceled health insurance policies has raised new questions for the individual and small group marketplaces in 2014.

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Knowing when to avoid left turns

This month’s issue of The Actuary features the last article in a three-part series on thinking and decision making co-authored by Milliman’s Neil Cantle and by Willis Re’s Dave Ingram. Entitled “Actuarial Thinking: Knowing When to Avoid Left Turns,” the article explores when actuaries should use a heuristic or systems analysis method of decision making. Here’s a sample:

Integrating techniques more formally into actuarial work that can help to make sense of the underlying mechanisms of problems will help to ground models more clearly in reality and therefore enhance the role of actuaries in explaining their models and demonstrating their value. It will also help users to understand the deficiencies of models so that they appreciate when the model can be used and when it cannot.

Read the entire article here.

Solar cell guarantees: When recycling gets expensive

While solar energy producers have a bright future ahead, how manufacturers handle guarantees for waste recycling and product reliability may determine who ultimately survives. The uncertainty around these guarantees highlights a critical exposure producers face: potentially large liabilities down the road. This also puts at risk those that finance solar energy manufacturers, including banks, equity investors, and debt investors.

For solar producers, one big concern involves managing the recycling cost of the material when it reaches the end of its useful life. There are also product guarantees, the promises by producers that panels will perform above a certain level of efficiency over a long time period, generally 20 years or more.

A new Milliman Insight article looks at how solar producers and stakeholders need to carefully consider the potential balance sheet and financial consequences of these risks, and set up a way to protect themselves from liabilities getting out of control.