< Previous19BEST’S REVIEW • DECEMBER 2022 Auditors & Actuaries Top Audit and Actuarial Firms Ranked by loss reserves. by Best’s Review Staff B est’s Review presents its ranking of the top auditors and actuaries. These rankings focus on independent accountants who audit an insurer’s annual financial statements and on third- party actuaries who provide an annual statutory actuarial opinion regarding an insurer’s policy and claim reserves. These listings of auditor and actuarial firms include only insurance companies with statements that listed auditors or external actuaries. The insurer population includes U.S. and Canadian companies that file with AM Best. Unlike the annual statutory audit, for which the insurer must use an independent certified public accountant, the actuarial opinion may be provided by an internal actuary, which is an actuary directly associated with the insurer. The data are derived from individuals or firms in the context of providing an annual audit or actuarial opinion. Many of the individuals or firms listed in the tables are likely to have additional insurance clients for which they perform a variety of other services, but such services are not reflected in this survey’s data. The primary task of audit firms working with insurance companies is to certify the audits of financial statements. That means they must understand statutory-based financial accounting. They also stay abreast of developments among regulatory bodies, particularly the National Association of Insurance Commissioners in the United States, to ensure compliance with current standards. Rankings for both the auditing and actuarial firms are based on the loss reserves held Best’s Review staff can be reached at bestreviewcomment@ambest.com. The Auditors and Actuaries Special Section is sponsored by Johnson Lambert. Special Section Sponsored by:Auditors & Actuaries 20 BEST’S REVIEW • DECEMBER 2022 by their client insurance companies. Again, as described in the methodology, not all insurers are included, and not all client relationships between insurance companies and their auditing and actuarial firms have been reflected. For property/casualty insurers, loss reserves are the total of loss and loss adjustment expense reserves. For health insurers, loss reserves are the sum of: 1. Claims unpaid, less reinsurance ceded. 2. Accrued medical incentive pool and bonus amounts. 3. Unpaid claims adjustment expense. 4. Aggregate health policy reserves. 5. Property/casualty unearned premium reserves. 6. Aggregate health claim reserves. For life insurers, loss reserves are the sum of: 1. Aggregate reserves for life and for accident and health. 2. Liabilities for deposit type contracts. 3. Life policy and contract claims. Count for each sector (P/C, life and health) includes companies for which an auditor or actuary was listed on the statements of companies designated in that sector, plus where they were listed by other companies that also had reserves of that sector’s type. For example, some companies designated as health carriers report P/C loss reserves in addition to health reserves; those companies are included in the count for the P/C sector, in addition to being included in the client count for the health sector. BR Actuary Firm – 2022 EditionP/C Loss Reserves (US$000)P/C Count PricewaterhouseCoopers60,451,28974 Beneficial Consultants54,863,6607 Ernst & Young46,457,99389 KPMG40,796,50862 Milliman35,710,281152 Willis Towers Watson23,563,184142 Deloitte14,528,25138 TMNA Services6,670,5676 Pinnacle Actuarial Resources3,595,50663 Regnier Consulting Group3,559,37251 Merlinos & Associates2,062,23085 Perr & Knight1,315,16046 The Actuarial Advantage1,053,83813 Streff Insurance Services1,025,91031 EVP Advisors854,73024 Christopher Gross Consulting847,2171 Oliver Wyman783,56616 Central Actuarial Solutions782,7886 Actuarial Advisors770,89316 FTI Consulting723,9834 Kufera Consulting549,39631 SG Risk470,1559 LWCC459,8931 Huggins Actuarial Services457,50317 Lewis & Ellis440,68224 Source: AM Best data and research Actuary Firm – 2022 EditionLife Loss Reserves (US$000)Life Count Milliman21,428,49719 Consultant Robert Haneberg20,481,8431 Lewis & Ellis10,929,95344 Miller & Newberg8,160,7611921BEST’S REVIEW • DECEMBER 2022 Special Section Sponsored by: Actuary Firm – 2022 Edition (continued)Life Loss Reserves (US$000)Life Count PricewaterhouseCoopers7,771,23110 Griffith Ballard & Company7,115,18512 Guggenheim Insurance Services6,183,8361 Willis Towers Watson5,948,3157 Allen Bailey & Associates4,746,6909 Actuarial Resources Corporation2,395,2466 Steimla & Associates1,353,7125 Rudd and Wisdom1,190,94728 Hause Actuarial Solutions974,64825 Actuarial Management Resources974,1615 Deloitte582,7251 Wakely538,6852 Bruce and Bruce537,6102 Bruce & Associates426,7771 CPS Actuaries303,26011 Everence Services278,7362 DJOrr Consulting237,4241 RGA Enterprise Services202,2041 Davies Insurance Services176,3401 Agee & Associates123,6219 Gwise Consulting97,4451 Source: AM Best data and research Actuary Firm – 2022 EditionHealth Loss Reserves (US$000)Health Count Milliman12,742,636178 Ernst & Young4,677,65820 Lewis & Ellis1,934,16519 Optum1,806,98919 Wakely1,443,54739 PricewaterhouseCoopers1,176,55712 Oliver Wyman981,24615 NovaRest Actuarial Consulting945,8841 Deloitte439,50311 KPMG399,0326 Lake Consulting338,7252 Willis Towers Watson252,0423 Barry, Dunn, McNeil & Parker143,6821 Lumeris Healthcare Outcomes132,2652 Lucerna Health75,7992 Aetna Resources70,9061 CBIZ66,38211 RSM US54,8642 Mulberry Management46,0384 Lee Benefits Consulting42,7673 Axene Health Partners38,0542 Bolton Health Actuaries36,7033 Crooks Actuarial Consulting30,2214 HealthCare Analytical Solutions30,0191 Actuarial Solutions27,4182 Source: AM Best data and researchAuditors & Actuaries 24 BEST’S REVIEW • DECEMBER 2022 Auditor Firm – 2022 EditionP/C Loss Reserves (US$000)P/C Count PricewaterhouseCoopers223,993,058233 Ernst & Young192,765,981235 Deloitte176,710,472151 KPMG126,887,647185 Johnson Lambert15,022,736128 EisnerAmper10,428,798 12 Baker Tilly6,036,70230 Mazars5,889,07038 BDO3,042,66430 Crowe2,951,56875 BKD2,898,66634 Strohm Ballweg2,389,63832 Plante Moran2,341,66229 Grant Thornton1,991,03317 Dixon Hughes Goodman1,412,87522 RSM1,229,31134 State Auditor General1,122,3691 Eide Bailly1,084,3667 MCM676,1564 Jaynes, Reitmeier, Boyd & Therrell610,82712 Mountjoy Chilton Medley524,4593 JLK Rosenberger521,93027 Brown Schultz Sheridan & Fritz478,68029 KMH465,3007 Johnson, Lauder & Savidge443,93013 EisnerAmper’s ranking was changed after including data from two insurance organizations that were not part of the original calculation. Source: AM Best data and research Auditor Firm – 2022 EditionLife Loss Reserves (US$000)Life Count PricewaterhouseCoopers1,802,463,49597 Deloitte733,331,742112 KPMG641,214,61572 Ernst & Young597,685,45198 Seward & Monde24,937,9131 BKD17,102,40018 Johnson Lambert9,575,44614 BDO9,019,00211 RSM8,929,33014 H2R CPA5,700,8997 Strohm Ballweg4,785,2965 JLK Rosenberger3,698,46410 Eide Bailly3,580,9298 Larson & Company3,198,7234 Kerber, Eck & Braeckel3,022,62213 Grant Thornton3,017,5248 Armanino2,762,1387 EisnerAmper2,546,2547 Mazars1,244,9013 Hosack, Specht, Muetzel & Wood1,032,1773 Dalby, Wendland & Company997,1911 Carr, Riggs & Ingram662,6097 Baker Tilly620,6621125BEST’S REVIEW • DECEMBER 2022 Special Section Sponsored by: Auditor Firm – 2022 Edition (continued)Life Loss Reserves (US$000)Life Count Crowe446,7152 Frank J Baker & Company404,0201 Source: AM Best data and research Auditor Firm – 2022 EditionHealth Loss Reserves (US$000)Health Count Ernst & Young41,978,981185 Deloitte27,901,831147 PricewaterhouseCoopers20,217,233127 KPMG14,740,739114 Grant Thornton4,464,81525 Baker Tilly1,861,17720 BKD1,212,20323 RSM1,119,61819 Eide Bailly972,48214 Plante Moran887,34335 CliftonLarsonAllen759,70112 Accuity634,7583 Moss Adams377,75710 Kernutt Stokes253,1532 Carr, Riggs & Ingram193,2386 Wipfli177,3408 BDO176,4676 Centeno Figueroa & Co.155,7611 Marcum153,7841 Dixon Hughes Goodman152,3792 FORVIS139,5102 Baird, Kurtz & Dobson135,2871 McGee, Hearne & Paiz120,5212 Baker Newman Noyes92,5425 Brown Smith & Wallace86,0031 Source: AM Best data and research26BEST’S REVIEW • DECEMBER 2022 COVID-19 Mortality Trends, Interest Rates and Climate Change Seen as Key Issues for Actuaries in 2023 Nik Godon, director of insurance consulting and technology at WTW, says actuaries can expect a lot of uncertainty and volatility in 2023. Godon was one of the speakers at the Society of Actuaries’ ImpACT conference. by Patricia Vowinkel A ctuaries don’t typically like uncertainty, but that’s what they can expect in 2023, according to Nik Godon, director of insurance consulting and technology at WTW. Elevated mortality trends, rising interest rates and climate risk were the key topics during a roundtable discussion at a recent SOA ImpACT conference in Orlando, Florida. The conference brought together more than 1,600 actuaries to discuss the hot topics in the industry and help further continuing education for actuaries. In addition to its conference, the Society of Actuaries has also launched two new programs for actuaries. An SOA spokesman said the organization has developed a new certificate program for actuaries and others working with data topics involving climate risk that will begin Patricia Vowinkel is executive editor. She can be reached at patricia.vowinkel@ambest.com. Key Points Mortality Trends: Will there be permanent impacts that might change long-term mortality as a result of COVID? Interest Rates: Interest rates have been on the rise this year, but is it sustained or will it be temporary? Climate Risk: Companies will come under more pressure to disclose their investments. Auditors & Actuaries27BEST’S REVIEW • DECEMBER 2022 Special Section Sponsored by: in February 2023. The SOA also has launched a new affiliate membership supporting the pipeline for new actuaries. Visit the Society of Actuaries at www.soa.org for more information. Godon was one of the panelists on “WTW Roundtable – The Circus is in Town: Rising Interest Rates, Long-Term Impacts of COVID-19 Mortality, and More!” Godon spoke with Best’s Review about these key topics. The following is an edited transcript. The roundtable discussion covered three key topics: interest rates and the economy, COVID-19 mortality, and climate risk. What were some of the key takeaways from those discussions? I’ll start with COVID mortality. So in 2020, everyone was asking if the increased mortality was just a blip. You go through 2021 and it no longer seems like it’s a blip and then it’s continued in 2022. So, not necessarily at the same levels as what was seen in 2020 and 2021, but certainly still having a material impact on the excess deaths in the U.S. The conversation we had at the roundtable was around the fact that we now know this is likely not just a temporary blip. In the short term, actuaries are expecting that there’s still going to be some amount of elevated deaths. It’s not just COVID. There’s been an overall increase in the entire U.S. of excess deaths, with COVID being one of the causes. But then other causes have also increased as well recently, such as excess deaths from accidents or overdoses. So there’s just this expectation that mortality may be elevated in the near term. A lot of actuaries think there’s still going to be an extension into 2023 of some kind. But then the broader question is, are there permanent impacts here that might change long- term mortality as a result of COVID? You hear discussions about long COVID, but you’ve also had millions of Americans who had COVID, many of them asymptomatic cases, many of them mild cases, but also many severe cases. And that leaves us with a lot of uncertainty. Is there going to be a permanent impact? And if so, how much might it be? Should you be assuming some form of increase in mortality, relative to what you thought it might be before COVID? Some actuaries argue COVID killed off the elderly and those with pre-existing conditions, meaning it simply accelerated a bunch of deaths and maybe the people who are still around are stronger. So maybe mortality will be slightly improved going forward. We speak to many different companies and actuaries, and there’s all sorts of opinions on what may or may not happen from a long-term perspective. There generally seems to be consensus that in the short term you are still going to have some excess mortality happening. But the real debate is over the long term. Are things going to be worse or better? We just don’t know at this point in time. Depending on what actuarial exercise you’re doing, some caution or prudence in what you’re assuming, with sensitivity testing in either direction, may be the way to go. What about the economic issues? [The year] 2022 has been very volatile. There has been a lot of rapid movement both in inflation and interest rates going up. Part of the roundtable message was volatility is likely going to continue. And from an interest rate perspective, generally people assume: “Oh, interest rates are up. You guys have been complaining for such a long time that they’ve been low. Aren’t you just super happy?” The answer to that question depends on the blocks of business that you have. For longer- term business, like long-term care and universal life, interest rates going up is generally going to benefit the insurance companies longer term. But insurance companies also have other blocks like fixed deferred annuities where lots of people have 3% guarantees from older days. A lot of the concern had been how long are they going to keep these policies? All of a sudden now you have this really fast increase in interest rates and people with what were thought to be attractive guarantees of 3% can now go and get a new contract at 5% or more guaranteed for five, seven, 10 years and so on. Are you going to start to see any sort of surrender increase from people leaving to buy new contracts? And when that happens, because interest rates have gone up so much, credit spreads have widened, will companies have to take losses on the sales of their assets? Depending Next >