Actuarial Consulting helps business entities measure the
present value of financial products or contractual
obligations as at specific date taking into consideration
the associated future risk profile.
Actuarial Consulting helps business entities measure the present value of financial products or contractual obligations as at specific date taking into consideration the associated future risk profile.
What are the industries that need Actuarial Consulting?
Actuarial Consulting is most in demand and sought by the insurance industry. In the State of Kuwait, the Ministerial Resolution No. 227 of 2019 was issued on 30 April 2019 requiring insurance companies operating in the State of Kuwait to engage an actuary for all types of insurance. The effective date of the said Resolution is 01 July 2019.
The Resolution is intended to protect insurance companies against failure risks through calculating the values of insurance products in a sound manner, making the appropriate provisions for insurance policies underwritten and ensuring that the provisions are invested in low risk financial instruments.
In this context, the Ministerial Resolution No. 2015 of 2019 concerning the Regulation of Actuary Profession permits outsourcing the actuaries’ tasks to auditors who have experience in insurance business or have agreements with a national or international firm with experience insurance business in accordance with the procedures prescribed under Article (42) of Insurance Law No. 24 of 1961, as amended. However, it is not permissible to concurrently act as auditor and provide actuarial services to the same client.
It is noteworthy that actuarial consulting services are provided to insurance companies in accordance with the requirements of Law No. (125) of 2019 regarding the Regulation of Insurance and International Standards of Actuarial Practice (ISAPs) issued by International Actuarial Association, headquartered in Canada.
What are other industries that need Actuarial Consulting?
IAS 19 require business entities with large human resources to have actuarial valuation conducted for the employees’ end of service benefits. The philosophy behind this process is the lack of knowledge of the exact due date of such obligation.
Therefore, the entitlement rates are identified through actuarial consulting, which considers the statistical rates of the State and of the entity itself when calculating the future values that an entity anticipates for the payment of such obligations. On the other hand, current assets are managed in a manner that ensures sufficient liquidity, which would be required to cover this obligation.
Therefore, all business entities operating in all industries with large human resources need to engage actuarial consulting services.
It is noteworthy that actuarial consulting services are provided to all business entities in accordance with the requirements of IAS 19 and International Standards of Actuarial Practice (ISAPs) issued by International Actuarial Association, headquartered in Canada.
What is the added value to business entities from Actuarial Consulting?
- Obtain accurate estimates of the present values of products or services taking into consideration the future risks;
- Provide future indicators that help business entity’s management carry out sound financial planning; and
- Obtain recommendations concerning the investment of provisions in low risk channels.
What are the services offered by Baker Tilly?
In this context, Baker Tilly provides the following actuarial consulting services:
- Provide outsourced actuary function to insurance companies; and
- Conduct actuarial valuations of the employees’ end of service benefits in accordance with IAS 19.