The Netherlands Authority for the Financial Markets (AFM) granted Milliman Financial Strategies B.V. (MFS) a licence for investment services at the end of 2020 (Article 2:96 of the Financial Supervision Act). MFS, with an execution platform in Chicago, London, Amsterdam and Sydney, manages financial balance sheet risks of pension funds and insurers worldwide. In 2018, due to the approaching Brexit, it was decided to serve the European clients of MFS from Amsterdam in addition to London. With the licence granted, MFS can continue to manage financial balance sheet risks for Dutch financial institutions, including pension funds.
“The asset management market is changing rapidly and is under pressure from increasing competition and regulation, resulting in lower management fees and higher costs. Since its inception in 1998, Milliman Financial Strategies has invested in state-of-the-art technology to provide its clients with effective, efficient and transparent hedging solutions. As a result, we are well positioned for these changes in the asset management market,” said Marcel Kruse, Director at Milliman.
“For many years, Milliman Financial Strategies has been helping financial institutions in the United States, Canada, Europe, Australia and Japan to manage market risks on their balance sheets. We are delighted to add our Amsterdam office to our global trading platform and offer our tailored hedging solutions to Dutch pension funds,” said Sam Nandi, Principal and Managing Director at Milliman.
“Milliman’s hedging and overlay solutions stand out from existing providers because we combine the innovative and solution-oriented approach of our consultancy practice with a robust in-house developed system architecture and enrich it with our actuarial knowledge and expertise, including that of Dutch pension funds and pension schemes,” said Rajish Sagoenie, Principal and Managing Director at Milliman.
Milliman is pleased to announce that it has chosen MatchingLink software to enhance its hedging and overlay solutions. With technology playing an increasingly critical role in every part of the investment cycle, Milliman recognizes the need to accelerate the development of digital solutions to ensure competitive hedging solutions offerings to its clients.
The Milliman-MatchingLink collaboration brings together deep skills in both business and technology to support Milliman’s clients and create more value. ‘With MatchingLink’s next-gen tech solutions we can add significant value to our hedging and overlay solutions and drive better results for our (pension fund) clients,’ says Rajish Sagoenie, Principal and Managing Director for Milliman, The Netherlands.
‘The seamless integration of MatchingLink software within the Milliman MG-Hedge® platform, combined with a robust and flexible system architecture, has convinced us that by using MatchingLink we can optimally serve our customers in the Netherlands and Europe. The Milliman-MatchingLink collaboration offers our (pension fund) clients state-of-the-art solutions to manage financial risks now and, in the future,’ says Marcel Kruse, Director Pension and Investment Risk for Milliman in the Netherlands.
MatchingLink’s technology platform operates as a flexible layer, communicating with existing systems. The platform combines a unique data-gathering solution with a calculation engine, analysis and reporting, a flexible workflow solution and artificial intelligence. The platform is both compliant and auditable by design. ‘With our software Milliman can unlock the full potential of the most advanced technology and increase the quality of their business on a daily basis,’ says Eric Pieper, MatchingLink’s CEO.
Milliman today announced the opening of an investment and risk management consultancy practice in the Netherlands. This practice complements Milliman’s Dutch actuarial and pension consulting practice and answers a market need for integrated actuarial and risk management services. Milliman has hired risk management expert Marcel Kruse, MSC, RBA, to lead the new practice.
“Dutch pension funds face challenging cost and governance pressures and are in need of both actuarial and risk management expertise as key lines of defense in the management of their plans,” says Rajish Sagoenie, Principal and Managing Director of Milliman’s Dutch pension practice. “Marcel is the ideal leader of our Dutch pension, investment and risk consultancy practice. He will help clients fill in the second line of defense within IORPII fully.”
“We believe complying with regulation is just a first step,” says Marcel Kruse. “With this initiative, we will help our clients integrate risk management in the investment policy, monitoring, and reporting—all of which are essential to making your pension fund a strong and future-proof organization.”
For more information about Milliman’s actuarial and risk management services, click here.
To determine required reserves for pension finds in the Netherlands, funds must consider various risk categories and their interdependencies. Reserves should be such that the overall likelihood of underfunding after one year is less than 2.5%. Mortality is one of the risk categories.
In the Netherlands, Milliman consultants distinguish three elements in mortality risk:
1. Process risk – This originates from abnormal adverse variation in insurance results in one year.
2. Trend mortality uncertainty – This covers the uncertainty regarding the longevity trend.
3. Negative stochastic deviation – This covers the risk that estimated mortality rates differ from the actual mortality rates.
The impact of trend mortality uncertainty is relatively large because a good estimate requires a large amount of data. And small changes in the trend can have large effects.
In this article, actuaries Rajish Sagoenie and Gert Maarsen describe in more detail how pension funds in the Netherlands deal with longevity risk and look into current developments, including updates to mortality tables.
Milliman has organized a roundtable discussion to explore integrated risk management (IRM) for Dutch pension funds, for Wednesday, 27 September 2017, in Amsterdam. While the Dutch National Bank (DNB) devotes a lot of attention to IRM and expects pension funds to have a structured approach, we find that many funds have difficulty formalising one.
At this roundtable, Milliman consultants will discuss the following:
• What is IRM and what does it entail?
• What are common IRM strategies and policies for Dutch pension funds?
• How can the pension board perform a thorough risk assessment?
• How can the board ensure proper commitment to IRM?
• How can the board ensure adequate monitoring and evaluation?
• How can the board ensure that the DNB is satisfied with a fund’s IRM?
Seats are limited. If you would like to attend, email us here for more information.
MBW International, a UK-based joint venture between Milliman and Barnett Waddingham, has organised a roundtable discussion entitled “UK defined benefit pensions, a current overview: What can we learn in the Netherlands?” on Tuesday, 3 October 2017.
The roundtable is aimed at Dutch companies with a deficit in their UK defined benefit (DB) pension schemes as well as companies interested in learning more about the latest UK pension developments.
The roundtable will focus on the following topics:
- An update on the UK pensions market and the impact it is having on Dutch companies—this will include recent analysis by the leading UK actuarial firm Barnett Waddingham LLP (the analysis will be distributed at the event).
- Current market opportunities which could help companies tackle their UK pension problems, including:
- Changes to the way UK employees can access their pension savings that make it more attractive for them to transfer DB benefits into defined contribution (DC) arrangements. This helps reduce the scale of the historic DB obligations.
- Continuing developments in the UK bulk annuity market.
- What can we learn in the Netherlands from our UK counterparts?
- Management of international pension plans—how can this be done in a more harmonised manner to increase efficiency, reduce risk, and achieve greater consistency across a business.
MBW International Directors Nick Griggs and Andrew Vaughan are guest speakers. Both Nick and Andrew have considerable experience dealing with these UK pension issues.
Seats are limited. If you would like to attend, email us here for more information.