Employee benefits (EB) pricing is one of the most complex challenges facing actuaries today. While individual insurance plans can rely on standard quotation tools – input age, gender, risk class, and other variables to get a quote – employee benefits demand extraordinary flexibility. Every client wants a customized plan, and that plan typically changes each year at renewal.
Insurance carriers win business by having flexible benefit designs and working closely with clients. A typical pricing discussion might explore multiple scenarios: What happens to premiums if we add more physical therapy coverage? How do costs shift if we enhance mental health benefits? EB pricing actuaries need to manipulate models, run scenarios, and make updates quickly during these client conversations.
This need for rapid modeling and quick turnaround times has made Excel the default tool for EB pricing actuaries. While spreadsheets provide the flexibility actuaries need, this approach has become increasingly challenging at audit time.
The industry faces a critical question:
How can actuaries maintain their efficient pricing workflows while meeting growing audit demands?
The Audit Nightmare
The traditional approach – storing password-protected spreadsheets on shared drives – has become an auditor's nightmare. Even the most meticulous EB actuaries face these challenging scenarios:
- “Which version of this spreadsheet was used for the final quote?” When every client has multiple versions, finding the exact file becomes a time-consuming treasure hunt.
- “Where is the documentation for these assumptions?” Reconstructing pricing decisions means piecing together scattered files and fragmented email trails.
- “How did this get approved, and who signed off?” Connecting approvals to specific versions becomes impossible when everything lives in email chains.
These scenarios multiply across teams and clients, creating an audit process that drains valuable actuarial time. With regulatory scrutiny intensifying, the need for a better solution has never been more urgent.
Transform Your Audit Experience with Coherent Spark
Actuaries shouldn't have to choose between pricing flexibility and audit readiness.
Coherent Spark bridges this gap by adding a layer of control and transparency to your existing Excel workflows, turning audit preparation from a time-consuming ordeal into a streamlined process.
Core Audit Solutions
Once spreadsheets are in the Spark platform, actuaries gain critical features that directly address audit challenges while maintaining their familiar Excel workflow:
- Version Control with Approval Tracking: Every version of a pricing model is automatically documented with who created it, who approved it, and when – eliminating the “which spreadsheet was final?” problem. Approvals are tied directly to specific versions, creating a clear audit trail.
- Scenario Documentation: All pricing scenarios, including different benefit designs and assumptions, are preserved with their calculations. When auditors question pricing decisions, actuaries can show exactly which options were considered and why final choices were made.
- Connected Model Transparency: The relationship between different pricing components (like manual rates and experience adjustments) becomes explicit and traceable, making it easy to demonstrate how final prices were calculated.
Enhanced Team Collaboration
Beyond solving immediate audit challenges, Coherent Spark's capabilities transform how actuarial teams work together to create and maintain pricing models:
- Model Modularity: Using Spark's XCALL function, complex EB models can be broken into logical components while maintaining clear connections. This enables teams to:
- Modify one component (like manual rates) without impacting others
- Create reusable model components that ensure consistency
- Provide auditors with clear views of how calculations flow
- Organization-Wide Benefits:
- Share validated model components across the organization
- Eliminate duplicate work through component reuse
- Enable real-time collaboration with clear version control
- Drive deeper business insights through transparent model connections
The Path Forward
By embracing Coherent Spark, EB pricing actuaries can maintain the flexibility they need while adding the control and documentation that auditors demand.
The result is dramatic time savings during audits and more efficient collaboration across teams – all while keeping the familiar Excel interface that actuaries prefer.
Making this transition doesn't require learning new pricing tools or changing proven workflows. Instead, it adds a layer of control and transparency that transforms the audit experience from a dreaded ordeal into a streamlined process.
