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Trust can be hard to earn but often easy to lose. This is especially the case with complicated and complex businesses and processes. As the models that companies develop and use also become more complex, many different stakeholders are holding companies responsible for their fairness and effectiveness. This is where PwC’s Trust Modeling team can come in. Our group of multidisciplinary subject matter specialists have trusted frameworks as well as emerging methods and tools to help provide stakeholders with an independent opinion on these critical models and processes.
"91% of business executives say their ability to build and maintain trust improves the bottom line."
Our services include:
Model assessments
Pairing Risk Modeling Service knowledge with industry-leading professionals, our approach to assessing AI and other complex models focuses on results. The work often includes independent reperformance and assessments of the approach developed. The result for our clients is an assessment including technical and business evaluations and increased transparency that can help explain the results.
Companies are quickly developing models to help them achieve their climate related strategic goals, including determining the physical and transition risks from climate change that can impact their business. PwC’s Climate Risk Modeling Services practice can align our risk modeling industry-leading professionals with our climate specialists who collectively have developed their own proprietary models. We can leverage their experience and professional advice so we can perform testing over other third-party models to help determine whether they are appropriate, fit for purpose, and well controlled.
Regulators and the public are concerned that decisions coming from AI/ML models can unfairly discriminate against protected classes. Our team’s domain knowledge in long regulated industries such as the insurance industry, paired with emerging knowledge of assessing AI/ML models can help insurers proactively plan to test for bias and respond to regulatory expectations.
When organizations set goals, there is typically a need to determine what is achievable, different strategies to accomplish these goals, and eventually, report on their success. When it comes to fostering inclusivity, there have been many studies demonstrating the positive impacts to innovation, creativity, and ultimately, financial outcomes. As such, companies are employing different strategies to help cultivate inclusivity, but often we do not see enough assessments determining that the strategies are solidly built and attainable. By leveraging methods and tools developed by our Risk Modeling Services practice, companies can assess these strategies and evaluate their own models to support them.
Insurance model management and opinions
In addition to regulatory pressure from various supervisory jurisdictions around the globe, boards want insurers to have strong model risk management practices in place throughout various models in their organization. We can assist with your risk management framework from first line model development and ownership responsibilities through second line model oversight and independent assessments to third line assessment, as well as the overall health of an entity's model risk management. PwC’s Risk Modeling Services team has deep experience across the whole insurance industry and models for decision making, risk management, and financial reporting. In addition, we have experience with these in each stage of the model development life cycle.
The Bermuda Regulatory Authority (BMA) introduced enhancements to the regulatory regime for life and annuity (re)insurers, proposed effective in 2024. In addition to new technical specifications for models, the BMA has set much stronger governance requirements for the models used in the development of the regulatory balance sheet, including the maintenance of model inventories, documentation, independent assessments, and internal audit review of the model governance program. Risk Modeling Services has deep knowledge in this area, that has resulted in transparency and clarity for many of our internal stakeholders and regulators.
Bermuda requires an independent actuary to certify that the technical provisions under the Economic Balance Sheet framework comply with the relevant regulations and are adequate to fulfill policyholders’ future obligations. Combining our local regulatory knowledge and audit skillsets, our team can help provide senior management and board members with our independent view of the technical provisions set by management as well as recommendations around governance, methodology and processes.
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