We firmly believe that all clients are different and deserve a bespoke service.
Take a look at some of our latest projects and case studies below.
Capital Optimisation
The Matching Adjustment is a flat addition applied to the risk free rate used to discount highly illiquid liabilities like annuities, backed by assets held to maturity.
OptiMA™ software is used by LV= to optimise the Matching Adjustment. OptiMA™ enabled LV= to perform the Matching Adjustment calculation much more efficiently with the consequence that they achieved a considerable balance sheet benefit. The OptiMA™ algorithm increased the Matching Adjustment and therefore the value of the liabilities decreased with the higher discount rate.
OptiMA™ works by optimising the calculation of the MA by using the optimal choice of assets. It does not impact the five PRA tests and in all cases where it has been implemented does not trigger a Model Change.
OptiMA™ is also used for selecting assets held outside the Matching Adjustment portfolio to put inside and can be used to identify the best assets to purchase for the portfolio.
Internal Model Application
Polaris acted as the lead engagement partner for the Canada Life Group for its successful Internal Model application approved by the PRA in November 2019. Polaris led on all aspects of the application including the Internal Model specification and design, development and implementation as well as validation, Board training and PRA engagement.
The approval was achieved by supporting Canada Life by delivering consulting services of the highest standard, ensuring a positive relationship with the regulator and by having strong programme management and governance disciplines throughout.
The approach adopted by Polaris enabled Canada Life achieve a swift and effective transfer to BAU after approval. The development approach ensured Canada Life staff were involved throughout the pre-application period and that the Internal Model was operationally ready to report capital numbers within the required working day timetable.
Internal Model approval was a major milestone for Canada Life and one we are proud to have supported.
IFRS 17
Polaris is in the process of supporting a number of clients in the UK, Ireland and Hong Kong with the implementation of IFRS 17. The support Polaris is providing is wide ranging, from programme management services, methodology and policy formation to modelling and implementation support.
On methodology we have assisted our clients with developing the default allowance used for the IFRS 17 discount rate curve. Many firms in Europe are expected to use default allowances similar to the Solvency II fundamental spread, but changes to the fundamental spread are likely to be required to meet the IFRS 17 standard for sensitivity to market risks. IFRS 17 requires default allowances to be sensitive to market movements whilst staying at manageable levels and not being distorted by changes in market liquidity. We have designed methodologies to help our clients overcome challenges in this area.
Our clients have also benefited from modelling services for SAS and Prophet as part of the implementation.
Board Training
Polaris has delivered a programme of Solvency II training for a UK based client. This involved running multiple training sessions over an extended period. The topics included complex technical methodology, governance and training on the practical uses of an Internal Model as well as consequences for other financial reporting metrics.
Polaris has web-based delivery solutions for training, meaning that for our client, executive and non-executive directors did not need to be physically present and could participate and interact with questions and challenges on the material through the web-based technology.
The training service was tailored for our client, with the needs of individual Board members agreed and delivered through the bespoke service. This included one-to-one training and establishing systems for future induction as part of the onboarding process for Board members in the future.
Risk Management
Polaris has provided clients with a wide range of risk management and governance related services. This had included support with the implementation of recommendations following regulatory of an internal ratings process. This required highly specialised support in the area of illiquid assets and understanding of the direction of travel on regulatory consultation ahead of it being consolidated in the form of a supervisory statement.
The Polaris leadership team also supported Prudential Group with the establishment of its risk function at its group head office, arising from the requirements of Solvency II. This involved establishing the parameters of how the risk function would operate through policies and standards, and the practical implementation, as well as supporting our client with the interactions with the regulator to satisfy compliance. This involved working across multiple territories including in the UK and Hong Kong.
Polaris also supported another UK client with establishing a European holding company for Solvency II and obtaining the company’s regulatory approval.
Programme Management
Polaris has supported clients with Programme Management services in various guises. As part of the delivery of the Internal Model for Canada Life, the Polaris leadership team provided senior programme leadership support. This provided quality assurance of the overall deliverables, strategic and logistical support as well as supporting management and the Board through its interactions with external stakeholders including the regulator.
For Prudential our leadership team also provided strategic and logistical support as part of the delivery of our services to them.
Polaris can provide clients with senior programme leadership services as well as more targeted project management services where this is required at an individual worksteam level. We see disciplined programme and project management as an important element of all of the services we provide.
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