Annuity Risk Model
The use of stochastic asset and liability models has become routine for larger insurance companies to value, manage and assess capital and price guarantees. These techniques are also now being used to understand and manage risks in detail in a number of specific areas within an insurer's business, including the annuity book.
With increasing longevity, the demand for increasingly sophisticated annuity-type products is likely to continue to grow. This in turn requires sophisticated modelling to understand the economic risks associated with these products.
The Barrie & Hibbert Annuity Risk Model is designed to give insurers an in-depth understanding of their annuity book and the management strategies that can be implemented to enhance the economic value of the book.
Benefits
- Fully integrated asset and liability modelling gives the flexibility to model cashflow matching and management actions, such as dynamic investment and capital management strategies.
- Aids the understanding of the impact of alternative asset strategies by allowing sophisticated asset strategies and associated management actions to be assessed.
- Allows complex interactions between assets through the implementation of a full Monte-Carlo simulation tool that allows the modelling of joint behaviour of complex assets - not always available in historical simulation or closed form modelling.
- Adapts to evolving business requirements thanks to frequent re-calibration, combined with our ongoing Research & Development programme.
- Brings access to the 'thought leadership' within our team of actuaries, economists, PhD scientists and software professionals, who have a depth and breadth of expertise and an unrivalled track record of experience in implementing stochastic solutions for insurance groups around the world.