Pension Risk Transfer Pricing Support

Objective

A Canadian life insurer needed an experienced annuity actuary to extend its AXIS model for pension risk transfer and longevity swap pricing, including related reinsurance calculations. The contractor would work directly with the chief product actuary.

The client had a rate limit in Canadian dollars and needed a US-based contractor who could work remotely, complete its vendor onboarding and begin model development with minimal orientation.

Scope of Work

The placement was scoped as contractor support to the pension risk transfer pricing team. Four areas of work were in scope over the life of the engagement:

• Development and testing of the AXIS annuity model for pension risk transfer and longevity swap pricing.
• Reinsurance modeling within the annuity module, to the extent the platform supported it.
• Automation of the pricing workflow, to reduce manual steps between model runs and pricing output.
• Support on a request for proposal as the client’s transaction pipeline required.

The client adjusted the work as its pricing plans changed.

Services Provided

Matching on Product and Platform

The selected contractor is a US-based FSA and MAAA with seventeen years of experience in consulting, insurers and audit. His recent work included leading LDTI changes for payout annuities and pension risk transfer in AXIS. That experience matched the client's product, platform and seniority requirements.

Pricing to the Client’s Budget

Graeme Group and the contractor agreed a US dollar rate that met the client's Canadian dollar budget. The rate was more than a quarter below the contractor's usual US charge-out rate.

Completing Vendor Onboarding

The client engaged contractors through a managed services provider. Graeme Group was set up as a sub-vendor, executed the provider’s assignment agreement, and supplied the documentation the provider required. The contractor started within four weeks of the first conversation with the pricing team.

Adapting the Work as Priorities Changed

During the engagement, the annuity module's reinsurance functionality limited the original development plans. The client redirected the contractor to pricing automation and then request-for-proposal support. It extended the contract twice while reviewing its plans.

Deliverables

The contractor worked on the client's models and pricing processes. Graeme Group provided:

• An FSA with pension risk transfer, payout annuity and AXIS experience.
• An agreed rate within the client's Canadian dollar budget.
• Sub-vendor onboarding, contracting and monthly invoicing through the client’s managed services provider.
• Continued support as assignments changed from model development to automation and transaction work.

Outcome

• Started Within Four Weeks: The contractor completed vendor onboarding and began work within four weeks of the first conversation with the pricing team.
• Extended Twice: The engagement ran for nine months, from August 2024 to May 2025, with two extensions at the client’s request, and concluded once the request-for-proposal support was complete.
• Several Areas of Support: One contractor supported model development, pricing automation and transactions as priorities changed.
• Further Work Discussed: The client subsequently briefed Graeme Group on other modeling and product development programs.