Risk & Capital Strategy

Macro-economic instability and a softening underwriting cycle are testing the ability of insurance companies to effectively manage their capital. Additional capital uncertainty is being driven by regulatory changes, the impending Solvency II capital requirements and the potential for changes in IFRS/GAAP accounting standards. Our Risk & Capital Strategy team delivers practical advice on how insurers can navigate these challenges in order to maximize enterprise value.

The team works alongside our Analytics professionals to advise clients on capital and reinsurance optimization strategies, analyzing the links between risk, volatility, capital and value. As the risk and capital needs of insurers vary around the world, the team has adopted country-specific strategies with an emphasis on local issues.

Delivering Unmatched Solutions

Client solutions are developed through our world class financial modeling tools coupled with the full breadth of our expertise in catastrophe modeling, non-catastrophe risk parameterization and rating agency expertise. Our ability to deliver unmatched solutions to clients’ risk and capital strategy questions is driven by:

• Award-winning dynamic financial analysis modeling tool, ReMetrica®, supporting enterprise risk management and economic capital modeling
• An in-depth understanding of Solvency II allowing us to provide a comprehensive overview of the EU regime from a variety of perspectives and offer partial internal model solutions through a template in ReMetrica that automates the process of building a partial internal model at minimal cost Unparalleled catastrophe modeling expertise resulting from numerous client engagements using vendor-based models and being the only reinsurance broker with a catastrophe model development firm, Impact Forecasting
• The industry’s leading publication on non-catastrophe risk parameterization, our Insurance Risk Study, for modeling and benchmarking underwriting risk
• Substantial expertise with the analyses used by major rating agencies to assign financial strength ratings and helping clients achieve their rating goals in concert with financial and strategic objectives
• Broad insight into local regulatory and accounting regimes that impact the level and use of required capital

Key Capital Strategy Projects

In the current environment, insurers need to rationalize the link between their risk tolerance, their risk capacity and the compensation received for taking risk. The Risk & Capital Strategy team helps clients address this need, from setting catastrophe capacity limits to cost of risk allocations and reserve risk quantification.