April 17th, 2017

Analytics: Fueling Risk-Informed Decisions: Part III: Strategic and Risk Capital Management

Posted at 1:00 AM ET

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Tim Gardner, President, North America

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Insurers who rely on strategic risk and capital management analytics to optimize their return on capital require a proactive capital management strategy that is in line with Own Risk and Solvency Assessment (ORSA), rating agency objectives and/or management’s internal capital adequacy benchmarks. To support this objective, a wide variety of tools and solutions are available to help measure capital adequacy - from deterministic models to licensable enterprise-level dynamic financial modeling solutions that advance a company’s ability to measure risk, profit and capital to optimize returns.

The ability to articulate and integrate risk tolerance guidelines into capital management strategy is a key best practice in this area. With new analytics tools and databases, insurers can develop these guidelines in accordance with industry practices and the expectations of external stakeholders, for example, rating agencies.

Guy Carpenter’s MetaRisk® and BenchmaRQ® are economic capital platforms empowering decision makers with a deeper view of risk drivers. For example, BenchmaRQ serves as an excellent foundation to objectively view asset, catastrophe, pricing and reserve risk relative to peers in order to set proper reinsurance and capital decisions.

Looking Ahead

As we look ahead to 2017, the industry faces many challenges and opportunities. Insurers may continue to encounter significant disruption that requires them to innovate and be nimble, utilizing innovative analytic tools and solutions to help them optimize capital and drive profitable growth. Guy Carpenter is focused on the future and continues to invest in innovative resources and expertise to add client value.

Link to Part I>>

Link to Part II>>

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