Knowledge Bank

Case Studies

Psicle is used as the platform of choice for several London Market and South African clients. We have described a few case studies below:

1. Multi-entity insurer (Lloyd’s, Europe) (2017 Client)
Our client has adopted Psicle to automate their Solvency II calculations for their Lloyd’s and European entities, including the associated EIOPA and Lloyd’s reporting requirements.

Psicle has replaced a fragile manual modelling approach that relied upon over 70 spreadsheets. The manual spreadsheet approach was slow, prone to human error and lacked governance. Their new Psicle model is one fully integrated model for both the Lloyd’s and Company Market entities, and automatically populates their SII QRTs and Lloyds TPD forms. The new model also overcomes many restrictions faced in a spreadsheet environment (e.g. modelling each component of the Technical Provisions at a more detailed level) to allow for a more accurate calculation. Having data at a more detailed grain also allows for easier reporting.

Our client also has licensed our Standard Formula gadget, which enables them to integrate their Technical Provisions

2. Multi-entity insurer (UK, Jordan, Bermuda, Dubai) (2017 Client)
Our client uses Psicle to fully integrate their Reserving, Solvency II Technical Provisions and Solvency II Standard Formula process.

The integration between the Reserving and TP processes means that changes in reserves from different selections, loss ratios or payment patterns automatically flow into the technical provisions. The Psicle implementation has moved the Technical Provisions process from numerous extremely large, slow and opaque spreadsheets into a robust, transparent and fast environment. The TP calculation which used to take several hours to carry out now takes 40 seconds, and automatically populates the QRTs.

Our client has the functionality to specify the level of granularity that they wish their technical provisions to be calculated at – this allows them to produce cash flows at a policy level or at a more aggregated level, depending on the level of detail and model speed required.

This client is developing their model further to integrate an external capital model and credit rating agency’s capital models, as well as investigating an IFRS 17 Psicle solution.

3. Multi-entity insurer (Lloyd’s, Europe) including (2016 Client)
Our client uses Psicle to model their Solvency II Technical Provisions and Solvency II Standard Formula for their Lloyd’s and European entities.

The Psicle model has replaced a process that took almost an hour to run to a matter of minutes, whilst increasing the calculation granularity to process cashflows by Class, Solvency II Class, Solvency II Region, and Lloyd’s Risk Code.

Psicle is currently being explored to model the IFRS 17 reserves within the actuarial team, as well as assist the Finance function in performing their monthly requirements to populate the General Ledger. Under the IFRS 17 proposal, the Technical Provisions and IFRS 17 calculations will be extended to be at a policy level.

4. Multi-entity insurer (Lloyd’s, UK, Bermuda) including within Lloyd’s (2018 Client)
Psicle has recently been adopted as the Solvency II Technical Provisions and IFRS17 modelling platform by our client, who is are an organisation with a Lloyd’s, UK and Bermudian entity, as well as a Bermudian regulated Group.

Psicle has replaced the existing SQL based process which took 2 hours to run and cashflows were modelled by Class and Region, with a faster, more transparent process where cashflows are modelled by policy, which takes 10 minutes. At a lower level of granularity, our model takes 1 to 2 minutes. Our model also fully integrates the full suite of annual QRT, BMA, SFCR and MI reports.

Our client now has a single Technical Provisions model that is fit for purpose for solo entities, as well as automatically producing the consolidated Group TPs, including an allowance for their Intra-Group RI.

We are currently extending the model to be compatible with the IFRS17 standard.

5. Multi-entity insurer (UK, Bermuda, Ireland) (2016 Client)
Psicle is the TP and SF calculation engine for our client who have several entities reporting in Europe and Bermuda. As described in previous case studies, Psicle runs the process end to end including a suite of QRT, BMA and MI reports.

6. Lloyd’s agency with multiple syndicates (Late 2018 Client)
Psicle has recently been selected to be the Technical Provisions platform for a Lloyd’s managing agency running several syndicates. This model is expected to be rolled out in the first half of 2019.

Psicle was selected to overcome the burdens of running business critical models in Excel, where the processes became opaque, slow and fragmented.

We are currently designing the system to integrate the syndicates, which currently run their models using different approaches, onto one consolidated platform. The model will read data directly from source systems, minimising manual data work, and run through to produce the Lloyd’s ASR and TPD returns.

7. Multi-entity insurer with 4 Lloyd’s Syndicates and a Company Platform (2019 client)

In early 2019, Psicle was the selected vendor to industrialise the Solvency II TP and IFRS17 modelling process for a large insurer with several entities.

In 2019, we are expected to develop a SII TP process for all entities that integrates into source and target systems, and provides the Pillar 3 and Lloyd’s required reports. In the latter stages of 2019, we are excited to work with our client to build an IFRS17 PAA and GM process that integrates directly with the SII Cashflow model.

8. SAM/ FSI Technical Provisions (South Africa)

Our client wanted a solution that will allow the technical provisions to be updated quarterly to meet strict and pressured timelines. The technical provisions also needed to feed directly into the standard formula calculation to eliminate manual intervention and possible errors. Several different sources of data (such as finance and actuarial) are used as input into the process. Psicle allows the user to set up any manual adjustments needed, like excluding known loadings from the best estimate reserves. The Psicle Cashflow gadget is used to project the technical provisions into the future based on the expected payment period and then discount them at the provided interest rate. The Psicle Cashflow gadget provides flexibility in terms of the period timestep, future period, the number of classes and patterns used, whether you want discounted or undiscounted cashflows and how you want to define the technical provisions output.