Pension Risk Transfer Pricing Support for a Canadian Life Insurer

Objective

A Canadian life insurer’s pension risk transfer team needed an experienced annuity actuary to extend its AXIS annuity model for pension risk transfer and longevity swap pricing, including the reinsurance modeling those transactions require. The work was model development inside a live pricing process, and the team wanted someone who could work directly with its chief product actuary rather than through an intermediary.

The constraint was budget as much as skill. The Canadian contract market for senior AXIS actuaries with pension risk transfer experience is thin, and US contractors price in US dollars at US rates. The insurer had a rate ceiling set in Canadian dollars. It needed a contractor who could work remotely from the United States, clear the vendor onboarding requirements of a regulated financial institution, and be productive inside the model without a ramp.

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’s pricing team set the scope and moved it as its pricing program was re-planned during the engagement.

Services Provided

Matching on Product and Platform

The placed contractor is a US-based FSA, MAAA with seventeen years across consulting, direct insurers and audit. He is an AXIS and Prophet modeler whose most recent work before the placement had been leading the LDTI changes for payout annuities and pension risk transfer in a client’s AXIS model. The match was made on the specific combination the seat needed: pension risk transfer and payout annuity products, the AXIS platform, and the seniority to work directly with the client’s chief product actuary.

Pricing to the Client’s Budget

The client’s target rate was set in Canadian dollars. Graeme Group and the contractor agreed a US dollar rate that brought the seat within reach of that target, at a discount of more than a quarter to the contractor’s US charge-out rate, so that the client could proceed.

Onboarding Through the Client’s Vendor-of-Record Process

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.

Redirecting the Seat as Priorities Changed

Part-way through the engagement the client’s pension risk transfer team reviewed the direction of its pricing process, and the annuity module proved to be a constraint on the reinsurance modeling the original scope required. Rather than end the placement, the client redirected the contractor to automation of the existing pricing process and then to support on a request for proposal, and extended the contract twice while it settled its plans.

Deliverables

This engagement was structured as contractor support, so the outputs are the client’s own model and pricing artifacts. What Graeme Group provided was:

• An FSA with pension risk transfer, payout annuity and AXIS experience, matched on evidence against the seat.
• A commercial structure that met the client’s Canadian dollar budget.
• Sub-vendor onboarding, contracting and monthly invoicing through the client’s managed services provider.
• Continuity as the scope moved from model development to automation and transaction support.

Outcome

• In Seat in Four Weeks: From the first conversation with the pricing team to the contractor’s start, including vendor onboarding at a regulated institution.
• 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.
• Breadth Inside One Seat: Model development, pricing automation and transaction support from a single contractor, redirected as the client’s priorities moved.
• A Standing Relationship: The client’s chief product actuary said the team would reach out on other opportunities, and the client has since briefed Graeme Group on its modeling and product development programs.

This engagement reflects the placement side of Graeme Group’s practice: a credentialed annuity actuary matched on product and platform, priced to the client’s budget, onboarded through the client’s own vendor process, and kept useful as the work changed shape.