Life insurers are in the business of taking on risks. Recent market uncertainty and the global trend towards market-consistent valuation and risk-based capital has meant that firms require more sophisticated valuation and capital models. A significant factor in this trend has been regulatory, such as Solvency II in Europe and ORSA in the US.
Insurers need more sophisticated solutions
Regulation is not the only driver. Increasingly, management want to have a better understanding of their balance sheet and associated risk exposure to support more effective decision-making.
The impact of risk-based capital on risk and actuarial functions has meant that insurance firms have adopted increasingly sophisticated approaches such as the use of Monte Carlo techniques. This has created new challenges for insurers, such as how to squeeze improved performance from their existing ALM systems.
So whether your challenge is to understand the value of guarantees embedded within your products, model risk-based capital using stochastic techniques, or investigate the impact of business decisions such as dynamic market-risk hedging programmes, Moody’s Analytics can help.