These activities determine how risks are assessed, accepted, priced, and managed, directly influencing financial soundness, customer confidence, and regulatory trust.
From an operational resilience perspective, Reinsurance Underwriting & Pricing is not a single activity but a chain of interdependent processes involving data, models, expert judgment, governance, and regulatory oversight.
Any disruption across this chain—whether due to data unavailability, system failure, resource constraints, or decision bottlenecks—can materially affect Malaysian Life Reinsurance’s ability to deliver this critical business service safely and on time.
Recognising this, the chapter breaks down the high-level Critical Business Service CBS-1 Reinsurance Underwriting & Pricing into its detailed business processes (Sub-CBS).
This decomposition aligns with the expectations articulated in the 2025 Bank Negara Malaysia (BNM) Discussion Paper on Operational Resilience, which emphasises understanding how critical services are delivered end-to-end, identifying vulnerabilities, and ensuring continuity under severe yet plausible disruptions.
The purpose of this chapter is to provide readers with a clear, structured understanding of how Reinsurance Underwriting & Pricing is operationally delivered within Malaysian Life Reinsurance.
By detailing the Sub-CBS, the chapter enables readers to appreciate the full lifecycle of underwriting and pricing—from strategy setting and data preparation to risk assessment, pricing decisions, governance approvals, and ongoing portfolio monitoring.
The objective is to equip readers with a practical foundation for subsequent operational resilience activities, such as identifying important business service dependencies, assessing potential points of failure, setting impact tolerances, and designing resilience measures aligned with regulatory expectations.
Table P1: Detailed Processes for CBS-1
|
Sub-CBS Code |
Name of Sub-CBS |
Description of Sub-CBS |
|
1.1 |
Risk Appetite & Strategy Setting |
Establishing the reinsurance risk appetite, underwriting guidelines, product eligibility criteria, and pricing strategy (e.g., target segments, limits, objectives). Involves senior governance approval and alignment with corporate strategy and regulatory expectations for risk-based pricing. |
|
1.2 |
Data Acquisition & Validation |
Collecting, validating, and cleansing internal and external data (e.g., historical claims, exposure data, mortality tables, market benchmarks). Ensures data quality and availability for pricing models and underwriting decisions — critical for resilient pricing accuracy and stress robustness. |
|
1.3 |
Risk Modelling & Pricing Analytics |
Actuarial and analytics teams use validated data and models (e.g., mortality/morbidity assumptions, risk loadings, scenario tests) to calculate premium rates, reserves, and risk-adjusted profitability metrics. Includes model validation and parameter sensitivity checks. |
|
1.4 |
Underwriting Submission Intake |
Receipt and logging of reinsurance submissions from cedants/brokers, including contract details, risk exposures, terms sought, and supporting documentation. Ensures traceability and readiness for assessment. |
|
1.5 |
Underwriting Risk Assessment |
Underwriters review submissions against risk guidelines, assess exposures, identify risk factors, and determine acceptance or referral needs. Involves risk scoring, flagging unusual risks, and consultation with actuarial/pricing teams. |
|
1.6 |
Pricing & Quotation Formulation |
Based on risk assessment, underwriters, in collaboration with actuaries, translate modelling outputs into final pricing proposals/quotes. Includes scenario adjustments, profit-loading, treaty terms, and competitive benchmarking. |
|
1.7 |
Regulatory & Compliance Review |
Ensure pricing and underwriting decisions comply with regulatory requirements (e.g., capital adequacy, documentation, pricing fairness). Includes audit trails, governance sign-offs, and documentation to meet supervisory and resilience expectations. |
|
1.8 |
Decision Governance & Approval |
Formal approval process for pricing and underwriting outcomes — involving delegated authority limits, exception escalations, and senior oversight to ensure decisions align with risk appetite and business objectives. |
|
1.9 |
Documentation & Contract Issuance |
Generation and issuance of underwriting contracts, policy documents, and reinsurance agreements. Ensures accurate documentation for legal enforceability and downstream processing. |
|
1.10 |
Portfolio Monitoring & Experience Analysis |
Ongoing monitoring of performance of underwritten risks (e.g., loss experience, trend deviations). Includes periodic reviews of pricing adequacy, emerging risks, and adjustment recommendations to improve resilience against adverse trends and disruptions. |
|
1.11 |
Exception & Escalation Handling |
Handling exceptions (e.g., complex risks, large exposures, policyholder queries) and escalation management to ensure continuity of service and timely resolution when standard processes are insufficient. |
|
1.12 |
Reporting & Feedback Loop |
Reporting of underwriting and pricing results to management, risk committees, and regulators; feedback into strategy, models, and guidelines to support continuous process improvement and resilience. |
Governance and Clarity: Each sub-process defines clear roles, approval points, and data flows essential for maintaining continuity and oversight of a core reinsurance function under both normal and stress conditions.
Risk & Data Controls: Activities like data validation, risk modelling, and monitoring help avoid underwriting errors and ensure pricing remains sound even when business conditions change.
Regulatory Alignment: In line with operational resilience principles, these processes enforce compliance checks, traceability, and oversight — supporting resilience against internal failures and external disruptions.
By articulating the detailed Sub-CBS for CBS-1 Reinsurance Underwriting & Pricing, this chapter establishes a critical building block in Malaysian Life Reinsurance’s operational resilience journey.
The breakdown clarifies how people, processes, data, systems, and governance interact to deliver one of the organisation’s most important services. It also creates transparency around where disruptions may arise and how their impacts could propagate across the underwriting and pricing value chain.
This structured view supports informed decision-making as Malaysian Life Reinsurance progresses to the next stages of its operational resilience implementation—namely, dependency mapping, scenario testing, and setting impact tolerances.
Ultimately, a deep understanding of these Sub-CBS strengthens the organisation’s ability to maintain continuity of underwriting and pricing services, safeguard financial stability, and meet the evolving expectations of regulators, cedants, and stakeholders even in the face of severe but plausible disruptions.
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Building Organisational Resilience: An Operational Resilience Guide for Malaysian Life Reinsurance |
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| eBook 3: Starting Your OR Implementation |
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| CBS-1 Reinsurance Underwriting & Pricing | |||||
| CBS-1 DP | CBS-1 MD | CBS-1 MPR | CBS-1 ITo | CBS-1 SuPS | CBS-1 ST |
For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.
Gain Competency: For organisations looking to accelerate their journey, BCM Institute’s training and certification programs, including the OR-5000 Operational Resilience Expert Implementer course, provide in-depth insights and practical toolkits for effectively embedding this model.
To learn more about the course and schedule, click the buttons below for the [OR-3] OR-300 Operational Resilience Implementer course and the [OR-5] OR-5000 Operational Resilience Expert Implementer course.
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