Algorithmics (Toronto) and Barrie & Hibbert (Edinburgh), vendors in the enterprise risk management and economic scenarios areas respectively, formed a strategic partnership to provide a comprehensive solution to insurance companies to allow them to measure, manage and report on economic capital management under Solvency II regulations. The partnership builds on Algorithmics' risk management solutions for insurance companies, in particular its replicating portfolio techniques, and Barrie & Hibbert's Economic Scenario Generator (ESG) and industry expertise. This solution is the first product of the partnership and subsequent plans for the evolution of products will address the specific requirements of the wealth management and pension sectors.
The new solution is designed to benefit insurance companies of all sizes that wish to upgrade their approaches to the calculation and management of economic capital, their market consistent financials and the associated risk exposures within a consistent, integrated enterprise risk management (ERM) and scenario framework spanning both assets and liabilities. The solution provides for improved precision, increased frequency and greater diligence in the process, according to the partners. It includes comprehensive financial modeling, risk aggregation, standardized replicating portfolios for all major markets, market data and updated economic scenarios.
According to Andrew Barrie, executive director and founder, Barrie & Hibbert, added: "Many insurers already have strong processes for economic and regulatory capital valuation. The challenge for Solvency II in general, and the use of internal models in particular, is extending these processes, filling the gaps, creating greater transparency, providing full audit trails, and facilitating 'real time' risk management," he said in a statement.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio