Capital management

In the rapidly changing arena of capital management, Milliman offers objective insight on managing risk.

As the insurance industry develops more complex, riskier products, and ways to mitigate such risks, new measurement tools are emerging to better assess those risks and establish needed capital and reserve levels. Economic capital calculations have become crucial for determining how much capital is needed and how much is truly available. The methods and best practices for determining economic capital are still evolving.

We advise on a wide range of capital management services, including reinsurance, asset liability modeling, mergers and acquisitions, securitization, and hedging.

We are experts at assessing capital requirements under a multitude of frameworks around the world. Our risk management expertise uniquely positions us to provide advice on strategies to manage capital.

Client-specific economic capital models

Insurers rely on Milliman's strong track record of tailoring internal capital models to satisfy individual client needs. We can provide the incisive analysis necessary to meet regulators' requirements and to conform to emerging industry standards in the United States, Solvency II in Europe, and the IAIS' global framework.

Milliman works with capital-management clients in two ways. We develop capital models for insurers from scratch, using our exclusive software tools, such as MG-ALFA® and MG-Hedge®. We also assist companies in adapting their existing models to incorporate newer, more sophisticated risk-evaluation methods.

Evaluating risk from every angle

The result is a complete picture that takes into account underwriting, credit, market, liquidity, and operational risks. Each risk is then evaluated for volatility, unforeseen catastrophe, and modeling uncertainty.

Having just the right amount of capital has never been more important. Too much and business returns suffer, and product prices may rise to uncompetitive levels. Too little and a company may run afoul of regulators and rating agencies and be at risk of insolvency.

We can help you find that perfect balance point, where you’re best positioned to excel in today's competitive marketplace.

Our support is tailored to the client's specific requirements in every case. We have a wealth of global expertise in helping clients discover the optimal balance of capital management strategies to achieve their goals. As we never work on commission, our independent stance makes us a highly sought source of advice in this field.