Awards 2011: Risk engine: Milliman

Risk engine: Milliman

This year, Milliman undertook its largest ever project: overhauling the actuarial systems of UK closed life fund consolidator, Phoenix Group.

The project showed off some of the key innovations and enhancements that Milliman had developed for its risk engine, MG-Alfa.

Brian Reid, MG-Alfa sales director at Milliman, says: “As a consolidator of closed life funds Phoenix ended up with a collection of models on different systems. As a result it was impossible to meet the requirements of Solvency II.”

Milliman consolidated the models onto a single platform and, crucially, put the product processes in the Microsoft Azure Cloud. “As a result it has a web-based user interface, which gave unlimited access to the system from any devices including smartphones. The Cloud also gives unlimited resources – the client can request 10,000 computer processors if it wanted,” says Reid.

“Another advantage of the Cloud is that it works on a pay-as-you-go basis. It also provides disaster recovery as if one data centre fails another can be used. The Cloud provides a solution that is cost-effective and meets the requirements of Solvency II,” says Reid.

The automation of the processing was absolutely necessary to meet time frames and requirements. “Quarterly valuations are initiated and the delivery of data and results are done without any manual intervention,” Reid says.

Recent enhancements to MG-Alfa have focused on production processing and automation. “The enhancements allow clients to design models and allow for automation and parameterisation of all the different risks, shocks and analysis to meet Solvency II requirements,” Reid says.

MG-Alfa has already developed a strong market share in the US and the company is now focusing on developing markets in the UK and Europe, using some of the elements developed during the work with Phoenix. “We will look to commercialise the by-products of the Phoenix project, such as the integration with the Cloud and the production elements,” says Reid.

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