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As one of South Africa’s largest actuarial practices, we have developed deep industry and technical knowledge across a broad landscape of industries. By building strong relationships with our clients and within the global PwC network, we ensure that we are always able to deliver insightful and relevant solutions to significant and complicated risks faced by our clients.
As ARQ, we are passionate about solving problems and building trust in society. We harness our deep industry experience and collaborate across our international network to develop innovative solutions for our clients.
How we can help you
We predominantly cut across the insurance and banking value chains, supporting and/or leading our clients in a number of services. However, our reach does not stop there. We are a truly diverse team of problem solvers and are proud to offer our actuarial services to a number of other industries. Explore our actuarial services below.
IFRS 17 is a significant development in accounting that is having a fundamental impact on the methodology, processes, systems, data and financial statements of insurance companies.
We led the implementation of IFRS 17 by partnering with large insurers from when the standard was released in 2017, and therefore have a long track record of practical experience across all aspects of the implementation journey which you can benefit from. This includes not only the learnings obtained, but also tools and accelerators. Our IFRS 17 Solved suite of solutions includes a fully-fledged, production-ready IFRS 17 solution which was developed based on our implementation experience.
The PwC IFRS17 Managed Service leverages IFRS 17 Solved to provide a cost effective solution for insurers in any market. We offer flexibility in the level of support provided, from a full outsourcing of this aspect of your process to simply providing access to our solution through the cloud. Given that IFRS 17 Solved is pre-built and fully configured, insurers do not need to purchase, configure or maintain their own IFRS 17 solutions leading to significant cost savings. Insurers who have already implemented the standard can consider switching to IFRS 17 Solved to optimise their processes by outsourcing this aspect which is highly technical, yet not particularly bespoke to individual insurers.
Combining our deep industry knowledge with extensive experience and understanding of the regulatory environment offers us a unique ability to assist our clients with their asset-liability management (ALM), hedging processes and related reporting exercises. We can help to understand the risks inherent in frameworks and processes, and ensure that sound risk management practices are in place to identify, measure, monitor, control and report on these risks.
Related to ALM is the broader practice of balance sheet optimisation. In the current economic environment there is increased pressure on profitability and the long-term sustainability of this, placing greater scrutiny on the use of capital resources. We can help you to develop the strategic insights, efficient capital management and effective risk management processes that are critical to generating favourable and sustainable returns.
We can also help you to understand and use new regulation to your advantage. For example, we can help you to identify opportunities for acquisition, divestment or restructuring, as well as help you put processes in place to enable prompt reporting.
Examples of areas where we can provide assistance include:
- Investment strategy
- Reinsurance optimisation
- ESG strategy and reporting
The current uncertain business and economic environment leads to various risks that need to be managed and understood by a business to be resilient and successful. One of the key risks is credit risk (including uncertainty caused by volatile economic conditions) due to the non-payment of loans or other amounts that are due. The exposure to this risk could be as simple as a trade receivable due from a client or as complex as a structured loan guaranteed by multiple entities.
We specialise in the estimation of these risks for both retail and wholesale clients using a combination of bespoke and automated solutions developed through our vast experience across:
- Banks
- Other lending institutions
- Insurers
- Telecommunication companies
- Retailers
- Other corporates
Banks additionally face a range of other risks such as liquidity, operational, regulatory and market risk.
Through our work with the majority of the banks operating in the South African and wider African environment we have developed a range of techniques to tackle a wide range of areas such as:
- Impairment managed service including estimation, reporting and analytics
- Forecasting
- Stress testing
- Capital estimation
- Liquidity risk estimation
- Loan book, asset and liability valuations
- Risk scoring and pricing
- Machine learning and AI to support core banking strategies such as collections and cross selling.
The execution of business deals is complex, and those deals that do not achieve their original financial or strategic objectives are often as a result of the execution of the deal rather than the underlying strategy.
For business incubation, acquisition, divestiture and restructuring options, we can help our clients unlock value through pre-deal, deal and post-deal support services. We focus on areas such as the initial due diligence, identifying the drivers of the main risk exposure and options for funding arrangements geared towards the current regulatory regimes. We can also help our clients explore options for the most efficient risk mitigation and risk transfer, through developing the most strategically effective capital structures.
By combining our experience in risk management, data processes, analytics and technical expertise with that of the PwC specialist "Deals" teams, we help our clients not leave value on the table.
An ineffective, minimal reinsurance strategy can lead to insurers accepting more risk than their risk appetite allows for. Excessive or inappropriate levels of reinsurance cover result in insurers passing on too much profit to reinsurers. Through our market-leading expertise and experience in risk strategy and prevailing regulation, we help our clients to develop an optimal and tailor-made reinsurance strategy which aligns with their business strategy and risk appetites.
Quantitative modelling is a practice that uses both mathematical and statistical techniques to understand the behaviour of complex, interdependent and evolving systems.
We can help you design, implement and validate cost-effective and well-governed modelling systems capable of providing insights for your business and sharpening your competitive edge. We help our clients develop effective end-to-end modelling and reporting solutions using the right tools for the job and capitalising on the real value of AI within their organisations. This includes helping you to understand your business and technical requirements to ensure the technology solutions are robust, efficient, and sustainable.
We also assist clients with financial instrument valuations, as well as valuation of employee benefit schemes, share schemes and loyalty programmes.
Robust numbers are the cornerstone of any successful insurance business. Our market-leading experience, integration with audit and close links with regulators make us uniquely placed to provide assurance over your numbers and reporting systems.
Regulatory developments including SAM and IFRS 17 are heightening the risks of misevaluation and misstatement by demanding faster reporting turnaround and changing the basis for technical provision and capital calculations.
We are the leading provider of assurance and attest services in the South African insurance market. This includes validating numbers, reviewing reserving and capital requirements and advising on modifications and improvements.
Our assurance services are fully integrated with client audit and reserving support. Thanks to our global reach, we can provide assurance for all your international operations.
Working with many local and international insurers, we can assess your reserving against industry best practice and provide well tested solutions for improvement. We don’t just assess your numbers, but also assess other key aspects of your reserving including performing independent model reviews, reviewing compliance with regulations and reporting standards and assessing the general control environment and reporting processes.
Drawing on a combination of technical expertise and commercial experience, we can help you to assess the impact of your reserving on business development, pricing decisions and profitability. We can also help you cut through the complexities of technical provision calculations and other pressing regulatory changes.
We have industry leading expertise in the design and implementation of reserving solutions for insurers of various sizes and different levels of maturity. Our solutions are designed to be pragmatic, cost-effective and carefully tailored to the particular nature of your business and its corporate vision.
We believe that a strong digital toolkit can give businesses a competitive edge. That’s why we’re proud to work closely with our clients, leveraging our global network and cross-industry expertise to help them achieve their goals. Our team is highly skilled and well-equipped to meet the growing demand for outsourced actuarial services, thanks to our robust technology infrastructure.
Our Actuarial Managed Services platform provides you with access to a variety of digital cloud-based solutions. These solutions can assist with insurance risk modelling, reserving, capital management, strategic workforce planning, and a growing number of other applications.
You need to keep pace with today’s dynamics. But you also need to plan for the future. We are uniquely positioned to deploy surveying, a breadth of analytical tools and predictive modelling which can all reveal real-time workforce insights to see ahead.
Discover the untapped power of your people data with our expertise, capabilities and latest technologies and algorithms.
Share-based payments encompass virtually all transactions involving the issuance of shares or payments that are based on the market price of an entity’s shares. Companies can design an array of compensation arrangements for their directors, senior executives and employees. Companies can also exchange company value for BEE credentials utilising specialised structures to facilitate the transaction.
If this is your situation:
- You want to incentivise staff and align shareholder interests by issuing: share appreciation rights, share option schemes, performance share plans, bonus deferred plans, conditional share plans, restricted share plans and phantom share schemes.
- You want to transform your shareholder ownership structure and enter into a BEE transaction.
This is how PwC can help:
- We specialise in the valuation of BEE schemes and employee stock options as well as derivative pricing.
- We can provide detailed calculations of the accounting charge under IFRS2.
- We can help you determine suitable valuation and performance assumptions.
Clients must report specific information about their employee benefits provisions under the International Accounting Standard 19R (IAS 19R). IAS 19R requires an actuarial valuation of long-term employee benefits.
An actuarial valuation is an assessment of an entity's future liabilities (as of the reporting date) calculated using a set of forward-looking best estimate financial and demographic assumptions.
Our team can assist with the following:
- Provide professional guidance in setting the valuation assumptions
- Conduct actuarial valuations in respect of various long-term employee benefits
- Analyse the change in the year-on-year liability
- Project the accounting charge in future years
- Assess the sensitivity of the benefit liability to changes in assumptions
The service helps clients to satisfy their financial reporting requirements in respect of IAS 19R.
Institutions use financial instruments and derivatives primarily to optimise their capital structures, hedging risk exposure and transferring risk.
We offer valuation support in line with the requirements of IFRS 9, 13 and 15 for derivatives, as well as instruments exposed to market and credit risk (ECL and financial guarantees). We also offer support in line with the requirements of IFRS16.
We cover a wide array of instrument coverage:
- Interest rate products: (swaps, caps, floors, FRAs, money market, swaptions)
- Fixed income (bonds, FRNs, inflation-linked instruments, credit default swaps)
- Equity products (forwards, options, warrants, convertible bonds, exotics, total return swaps)
- Forex options (FECs, FX swaps etc.)
All industries have experienced increased pressure from shareholders, governments and society at large to not only be transparent regarding their current ESG (environmental, social and governance) practices, but also to set meaningful and realistic ESG targets and put strategies in place to achieve these.
With the release of new international standards dealing with disclosure of sustainability and climate-related information, focus is needed on end-to-end reporting processes. This can often involve generating or sourcing large datasets, validating and translating data into meaningful information, monitoring key metrics, and disclosing this information in the prescribed method. With the combination of our industry-specific knowledge, regulatory understanding, specialist skills in the areas of climate and broader ESG topics, as well as data analytics, modelling and reporting competencies, we can offer valuable support in this space.
Examples of areas in which we can provide support include:
- Developing and validating data processes for TCFD or other ESG-related reports
- Climate risk modelling (physical and transition) and strategy setting
- Emissions modelling and optimisation strategy
Our modelling capabilities cover both current emissions and climate risks, and future projections.
Global ambitions of net zero, security of electricity supply and the reducing cost of renewable energy are prompting governments and businesses to consider alternative forms of energy supply. These supply options require significant capital investment and have multi-decade impacts, and as a result require very careful consideration of an optimal design.
Our advanced electricity model captures the intricate dynamics of supply (of various forms), storage and demand to quantify the financial and non-financial benefits, costs and risks associated with various electricity supply options. Clients can therefore put numbers to strategies, thereby ensuring maximum value for their investment.
Along with our energy technical, regulatory and economic modelling team, we provide crucial support for national energy strategy development, including electricity, green fuel generation and future-proof industry development.
- IFRS 17 implementation support and managed services
- Asset-liability management and balance sheet optimisation
- Banking and credit risk
- Mergers and acquisitions
- Reinsurance optimisation
- Quantitative modelling, AI and valuations
- Auditing and broader assurance services
- Reserving and capital management
- Actuarial digitisation and transformation
- People analytics
- Share schemes
- Employee benefits
- Financial instrument valuation
- ESG strategy and reporting
- Energy modelling
IFRS 17 implementation support and managed services
IFRS 17 is a significant development in accounting that is having a fundamental impact on the methodology, processes, systems, data and financial statements of insurance companies.
We led the implementation of IFRS 17 by partnering with large insurers from when the standard was released in 2017, and therefore have a long track record of practical experience across all aspects of the implementation journey which you can benefit from. This includes not only the learnings obtained, but also tools and accelerators. Our IFRS 17 Solved suite of solutions includes a fully-fledged, production-ready IFRS 17 solution which was developed based on our implementation experience.
The PwC IFRS17 Managed Service leverages IFRS 17 Solved to provide a cost effective solution for insurers in any market. We offer flexibility in the level of support provided, from a full outsourcing of this aspect of your process to simply providing access to our solution through the cloud. Given that IFRS 17 Solved is pre-built and fully configured, insurers do not need to purchase, configure or maintain their own IFRS 17 solutions leading to significant cost savings. Insurers who have already implemented the standard can consider switching to IFRS 17 Solved to optimise their processes by outsourcing this aspect which is highly technical, yet not particularly bespoke to individual insurers.
Asset-liability management and balance sheet optimisation
Combining our deep industry knowledge with extensive experience and understanding of the regulatory environment offers us a unique ability to assist our clients with their asset-liability management (ALM), hedging processes and related reporting exercises. We can help to understand the risks inherent in frameworks and processes, and ensure that sound risk management practices are in place to identify, measure, monitor, control and report on these risks.
Related to ALM is the broader practice of balance sheet optimisation. In the current economic environment there is increased pressure on profitability and the long-term sustainability of this, placing greater scrutiny on the use of capital resources. We can help you to develop the strategic insights, efficient capital management and effective risk management processes that are critical to generating favourable and sustainable returns.
We can also help you to understand and use new regulation to your advantage. For example, we can help you to identify opportunities for acquisition, divestment or restructuring, as well as help you put processes in place to enable prompt reporting.
Examples of areas where we can provide assistance include:
- Investment strategy
- Reinsurance optimisation
- ESG strategy and reporting
Banking and credit risk
The current uncertain business and economic environment leads to various risks that need to be managed and understood by a business to be resilient and successful. One of the key risks is credit risk (including uncertainty caused by volatile economic conditions) due to the non-payment of loans or other amounts that are due. The exposure to this risk could be as simple as a trade receivable due from a client or as complex as a structured loan guaranteed by multiple entities.
We specialise in the estimation of these risks for both retail and wholesale clients using a combination of bespoke and automated solutions developed through our vast experience across:
- Banks
- Other lending institutions
- Insurers
- Telecommunication companies
- Retailers
- Other corporates
Banks additionally face a range of other risks such as liquidity, operational, regulatory and market risk.
Through our work with the majority of the banks operating in the South African and wider African environment we have developed a range of techniques to tackle a wide range of areas such as:
- Impairment managed service including estimation, reporting and analytics
- Forecasting
- Stress testing
- Capital estimation
- Liquidity risk estimation
- Loan book, asset and liability valuations
- Risk scoring and pricing
- Machine learning and AI to support core banking strategies such as collections and cross selling.
Mergers and acquisitions
The execution of business deals is complex, and those deals that do not achieve their original financial or strategic objectives are often as a result of the execution of the deal rather than the underlying strategy.
For business incubation, acquisition, divestiture and restructuring options, we can help our clients unlock value through pre-deal, deal and post-deal support services. We focus on areas such as the initial due diligence, identifying the drivers of the main risk exposure and options for funding arrangements geared towards the current regulatory regimes. We can also help our clients explore options for the most efficient risk mitigation and risk transfer, through developing the most strategically effective capital structures.
By combining our experience in risk management, data processes, analytics and technical expertise with that of the PwC specialist "Deals" teams, we help our clients not leave value on the table.
Reinsurance optimisation
An ineffective, minimal reinsurance strategy can lead to insurers accepting more risk than their risk appetite allows for. Excessive or inappropriate levels of reinsurance cover result in insurers passing on too much profit to reinsurers. Through our market-leading expertise and experience in risk strategy and prevailing regulation, we help our clients to develop an optimal and tailor-made reinsurance strategy which aligns with their business strategy and risk appetites.
Quantitative modelling, AI and valuations
Quantitative modelling is a practice that uses both mathematical and statistical techniques to understand the behaviour of complex, interdependent and evolving systems.
We can help you design, implement and validate cost-effective and well-governed modelling systems capable of providing insights for your business and sharpening your competitive edge. We help our clients develop effective end-to-end modelling and reporting solutions using the right tools for the job and capitalising on the real value of AI within their organisations. This includes helping you to understand your business and technical requirements to ensure the technology solutions are robust, efficient, and sustainable.
We also assist clients with financial instrument valuations, as well as valuation of employee benefit schemes, share schemes and loyalty programmes.
Auditing and broader assurance services
Robust numbers are the cornerstone of any successful insurance business. Our market-leading experience, integration with audit and close links with regulators make us uniquely placed to provide assurance over your numbers and reporting systems.
Regulatory developments including SAM and IFRS 17 are heightening the risks of misevaluation and misstatement by demanding faster reporting turnaround and changing the basis for technical provision and capital calculations.
We are the leading provider of assurance and attest services in the South African insurance market. This includes validating numbers, reviewing reserving and capital requirements and advising on modifications and improvements.
Our assurance services are fully integrated with client audit and reserving support. Thanks to our global reach, we can provide assurance for all your international operations.
Reserving and capital management
Working with many local and international insurers, we can assess your reserving against industry best practice and provide well tested solutions for improvement. We don’t just assess your numbers, but also assess other key aspects of your reserving including performing independent model reviews, reviewing compliance with regulations and reporting standards and assessing the general control environment and reporting processes.
Drawing on a combination of technical expertise and commercial experience, we can help you to assess the impact of your reserving on business development, pricing decisions and profitability. We can also help you cut through the complexities of technical provision calculations and other pressing regulatory changes.
We have industry leading expertise in the design and implementation of reserving solutions for insurers of various sizes and different levels of maturity. Our solutions are designed to be pragmatic, cost-effective and carefully tailored to the particular nature of your business and its corporate vision.
Actuarial digitisation and transformation
We believe that a strong digital toolkit can give businesses a competitive edge. That’s why we’re proud to work closely with our clients, leveraging our global network and cross-industry expertise to help them achieve their goals. Our team is highly skilled and well-equipped to meet the growing demand for outsourced actuarial services, thanks to our robust technology infrastructure.
Our Actuarial Managed Services platform provides you with access to a variety of digital cloud-based solutions. These solutions can assist with insurance risk modelling, reserving, capital management, strategic workforce planning, and a growing number of other applications.
People analytics
You need to keep pace with today’s dynamics. But you also need to plan for the future. We are uniquely positioned to deploy surveying, a breadth of analytical tools and predictive modelling which can all reveal real-time workforce insights to see ahead.
Discover the untapped power of your people data with our expertise, capabilities and latest technologies and algorithms.
Share schemes
Share-based payments encompass virtually all transactions involving the issuance of shares or payments that are based on the market price of an entity’s shares. Companies can design an array of compensation arrangements for their directors, senior executives and employees. Companies can also exchange company value for BEE credentials utilising specialised structures to facilitate the transaction.
If this is your situation:
- You want to incentivise staff and align shareholder interests by issuing: share appreciation rights, share option schemes, performance share plans, bonus deferred plans, conditional share plans, restricted share plans and phantom share schemes.
- You want to transform your shareholder ownership structure and enter into a BEE transaction.
This is how PwC can help:
- We specialise in the valuation of BEE schemes and employee stock options as well as derivative pricing.
- We can provide detailed calculations of the accounting charge under IFRS2.
- We can help you determine suitable valuation and performance assumptions.
Employee benefits
Clients must report specific information about their employee benefits provisions under the International Accounting Standard 19R (IAS 19R). IAS 19R requires an actuarial valuation of long-term employee benefits.
An actuarial valuation is an assessment of an entity's future liabilities (as of the reporting date) calculated using a set of forward-looking best estimate financial and demographic assumptions.
Our team can assist with the following:
- Provide professional guidance in setting the valuation assumptions
- Conduct actuarial valuations in respect of various long-term employee benefits
- Analyse the change in the year-on-year liability
- Project the accounting charge in future years
- Assess the sensitivity of the benefit liability to changes in assumptions
The service helps clients to satisfy their financial reporting requirements in respect of IAS 19R.
Financial instrument valuation
Institutions use financial instruments and derivatives primarily to optimise their capital structures, hedging risk exposure and transferring risk.
We offer valuation support in line with the requirements of IFRS 9, 13 and 15 for derivatives, as well as instruments exposed to market and credit risk (ECL and financial guarantees). We also offer support in line with the requirements of IFRS16.
We cover a wide array of instrument coverage:
- Interest rate products: (swaps, caps, floors, FRAs, money market, swaptions)
- Fixed income (bonds, FRNs, inflation-linked instruments, credit default swaps)
- Equity products (forwards, options, warrants, convertible bonds, exotics, total return swaps)
- Forex options (FECs, FX swaps etc.)
ESG strategy and reporting
All industries have experienced increased pressure from shareholders, governments and society at large to not only be transparent regarding their current ESG (environmental, social and governance) practices, but also to set meaningful and realistic ESG targets and put strategies in place to achieve these.
With the release of new international standards dealing with disclosure of sustainability and climate-related information, focus is needed on end-to-end reporting processes. This can often involve generating or sourcing large datasets, validating and translating data into meaningful information, monitoring key metrics, and disclosing this information in the prescribed method. With the combination of our industry-specific knowledge, regulatory understanding, specialist skills in the areas of climate and broader ESG topics, as well as data analytics, modelling and reporting competencies, we can offer valuable support in this space.
Examples of areas in which we can provide support include:
- Developing and validating data processes for TCFD or other ESG-related reports
- Climate risk modelling (physical and transition) and strategy setting
- Emissions modelling and optimisation strategy
Our modelling capabilities cover both current emissions and climate risks, and future projections.
Energy modelling
Global ambitions of net zero, security of electricity supply and the reducing cost of renewable energy are prompting governments and businesses to consider alternative forms of energy supply. These supply options require significant capital investment and have multi-decade impacts, and as a result require very careful consideration of an optimal design.
Our advanced electricity model captures the intricate dynamics of supply (of various forms), storage and demand to quantify the financial and non-financial benefits, costs and risks associated with various electricity supply options. Clients can therefore put numbers to strategies, thereby ensuring maximum value for their investment.
Along with our energy technical, regulatory and economic modelling team, we provide crucial support for national energy strategy development, including electricity, green fuel generation and future-proof industry development.
Work with us
Are you passionate about using your analytical skills to hep society to better understand and mitigate complex risks? Would you like to own your career development in doing so?
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