// . //  Insights //  Life Insurers Are Using Atlas For Principles-Based Reserving
Atlas, a cost-effective stochastic modeling platform — for modern annuity products

The world’s largest insurers are using Atlas for financial management of their annuity portfolios. Our modeling suite provides powerful process automation for hedging and financial reporting — ultimately unlocking valuable actuarial time for analysis.

US GAAP LDTI, VM-21, and IFRS 17 are forcing companies to develop models that incorporate more complex stochastic projections. At Oliver Wyman, we have solutions which can augment existing systems as well as options to modernize, re-envision and automate the financial reporting and risk management processes within your organization. Atlas, coupled with Oliver Wyman’s regulatory and actuarial expertise, can get your organization started quickly.

Below is a case study from a large US annuity writer, who was looking to efficiently value registered index-linked annuity (RILA) products under VM-21 requirements. Using the Atlas suite, the company was able to value the liability cash flows as well as determine the total asset requirement — and automate the process end-to-end. Atlas provided our client with ease of use, speed, cost-effectiveness, and control and automation features. For the full case study and analysis, please view our PDF document. 

Case study - RILA valuation under VM-21 requirements

First, Atlas generated liability cash flows for a RILA block with various crediting strategies. Using 80 processing cores on Amazon Web Services (AWS), and the standard American Academy of Actuaries scenario set, and Atlas valued a block of 50,000 contracts in 12 minutes.

Next, Atlas’s Asset-Liability Solver (ALM) calculated the total asset requirement (TAR) under VM-21. Our ALM solver calculated the TAR for all scenarios in less than 5 minutes. Scenario generation, processing, and report generation were all automated within Atlas’s workflow manager — virtually removing operational risk from the process.

Atlas’s modular design fits into your organization’s architecture 

Typical process flow

Derive total asset requirements (TAR) under VM21

The Atlas ALM solver performs the iterative calculations necessary to derive total asset requirements (TAR) under VM-21. Below, the exhibit shows the distribution of scenario results. Atlas’s flexible report generator allows an insurer to produce and distribute results consistent with its own enterprise-specific needs.

Atlas frees up your actuarial staff for value- added activities

The Atlas advantage

Reduce operational risk with a fully automated platform

Our high-performance systems can be run from your workstation, or efficiently distributed to the cloud. Control features provide highly automated and reliable production processes and the necessary firepower required for ad-hoc, exploratory and nested-projection analysis. Typically, 95% or more of a product’s features can be configured directly, with the remainder addressed through user-defined code. Assumptions are inherited from purpose-to-purpose, with a single source of truth across all modeling applications. The platform also provides integrated support for model and assumption governance processes.

Faster system runtimes, agility, and firepower

Our Atlas modeling suite meets your annuity valuation challenges. It is purpose-built for stochastic valuation, whether in hedging, statutory valuation, GAAP valuation, pricing, or ad hoc analysis and development. Accordingly, it is dramatically faster than legacy models.

As RILA blocks grow, and as principles-based reserving (PBR) places greater modeling demands on legacy systems, actuarial teams are under unprecedented stress. Atlas can deliver results much faster than legacy models, and can help free up your actuarial staff to focus on value-added activities. Please feel free to reach out to learn more about this case study, or to schedule a live demo.

Get started with Fulcrum

Atlas is a suite within Oliver Wyman Fulcrum, a proprietary platform where strategy and execution meet. Fulcrum offers solutions across many areas of insurance including data management, new product development, policy compliance, platform migrations, portfolio compression, hedging and analytics. Our set of proprietary tools combined with Oliver Wyman product and industry expertise allows clients to maximize operational efficiency and unlock the value of your actuarial staff.