Insights · Independent review

What a reviewer reads first

Independent review is often treated as an unknowable process that happens to a report after it is finished. It is not. Reviewers are looking for a small number of specific things, in a fairly consistent order, and a team that knows the order can remove most findings before submitting.

The order

The movement, before the level. Almost nobody starts with this year's number. They start with the change from last year, because a movement that is unexplained or suspiciously small is the fastest route to whatever is wrong.

The assumptions that moved, and the ones that did not. An assumption held flat through four years of drifting experience attracts more attention than one that changed. Holding a basis is a decision and needs the same justification as changing it.

The data reconciliation. Policy counts and sums assured from the administration system to the model to the report. If this is not shown, it will be asked for, and the delay costs more than including it.

Whatever is described as immaterial. The word attracts scrutiny rather than deflecting it, particularly where no number sits next to it.

Most findings are not disagreements about method. They are places where the reasoning was done but never written down.

What makes a report easy to sign

A clear statement of scope and what was not covered. A short summary of judgements taken, in one place, rather than distributed through the document. Numbers that reconcile to a named source. Sensitivities around the judgements that matter, not around the ones that are easy to run. And a plain statement of any departure from a Standard of Actuarial Practice, with the reasoning — disclosed departures are a normal part of practice; undisclosed ones are the problem.

Review is cheaper before the deadline

The most expensive review is the one commissioned a week before a board meeting, because at that point findings become negotiations. Commissioned earlier, the same findings are just improvements, and the reviewer is on the same side as the team.