Insurers increasingly turning to external actuarial firms

Canadian insurers are increasingly seeking the services of external or unaffiliated actuarial firms to provide actuarial options for annual statutory filings, says an A.M. Best Co. review.
“This is perhaps the most striking change in the data gathered as part of A.M. Best Co.’s 2007 annual review of the accounting and actuarial markets in the United States and Canada as they relate to the insurance industry,” says an A.M. Best release.
Reviewers examined the year-end 2005 statutory filings for more than 4,000 North American insurance companies collectively this survey sample wrote more than 98% of industry net premiums.
“Some spirit of the Sarbanes-Oxley Act of 2002,” was cited by researchers as a possible explanation for insurance firms increasingly turning to external actuarial sources.
The survey also showed some insurers moving away from using the same firm in both auditing and actuarial functions.
Like the 2006 study, both the auditor and actuarial markets remained dominated by a handful of firms servicing the larger, group-affiliated insurers.
A significant number of smaller accounting and actuarial firms filled the needs of small independent insurers and those with less standard ownership or profit structures.