ASSET MODELING FUNCTIONALITY STREAMLINED IN NEW VERSION OF RISK EXPLORER™
The new, leading-edge Version 11.3 of Risk Explorer™ has just been released for users worldwide, Alex Bushel,
URS CEO, reported. Version 11.3 contains new asset management
functionality enabling users to estimate asset risk on a single-year and
multi-year basis along with other user-friendly features.
The new functionality allows asset risk to be estimated accurately at
the individual security level without potentially harmful
approximations in the environment where assets and liabilities are
impacted by the same macroeconomic volatility. With other platforms,
such approximations have to be made when assets are grouped into classes
or buckets. This makes it harder to estimate risks to a given portfolio
New features related to modeling and management of asset portfolios
include: Dynamic asset grouping by sector, maturity, credit ratings or
other characteristics; Dynamic migration of individual securities due to
credit rating or maturity changes; Dynamic portfolio rebalancing based
on asset allocation percentages specified by the company; Dynamic asset
purchasing and selling during portfolio rebalancing.
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UTICA NATIONAL INSURANCE GROUP LICENSES URS PRODUCTS
Utica National, one of the top 100 property/casualty insurance
companies in the United States, recently licensed URS products Risk
Explorer™ and Predictable Dynamics (Economic Scenario Generator), Tom Byrnes,
Managing Director-North America, reported. Utica will use URS software
for financial analysis and economic capital modeling. Founded in 1914,
the Company has grown into a major insurer offering a wide range of
personal lines and specialty commercial insurance to the graphic arts
industries, educational institutions, volunteer fire departments,
religious institutions and libraries, among others.
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BERMUDA CAPITAL MANAGEMENT COMPANY SELECTS RISK EXPLORER™
Sirius Capital Markets (Bermuda) Ltd., (SCM) a recently formed
capital management company that focuses on Insurance linked securities
(ILS) signed up for Risk Explorer™. Tom Byrnes, Managing Director-North America, and Charles Carwin,
Technical Director-North America, worked with Sirius on the project.
The URS Dynamic Financial Analysis model is being deployed by SCM to
track and manage CAT-exposed contracts. SCM, is a third-party
reinsurance asset management arm of the White Mountains Insurance Group,
which recently launched its first ILS fund.
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MAJOR RUSSIAN INSURER ADOPTS URS LOSS RESERVING SOFTWARE
Renaissance Insurance Company, Ltd., a leading multi-line insurer in
the Russian Federation, has licensed URS reserving software. “We’re
especially pleased that this major insurer selected Res-Solver™ after a rigorous review of competing products, and we look forward to working with the Company on a package of URS software,” Alex Bushel,
CEO of URS said. Renaissance provides insurance products and services
to individuals and companies throughout Russia and internationally.
Known for innovation, Renaissance introduced online insurance in Russia
when it opened the country’s first virtual insurance sales center in
1999. The Company operates from headquarters in Moscow and maintains
offices in most major Russian cities.
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URS A FINALIST IN GLOBAL AWARD FOR BEST TECHNOLOGY PROVIDER
Ultimate Risk Solutions was one of five finalists honored as Best
Technology Provider in the Intelligent Insurer Magazine 2013 Global
Awards survey of insurance and reinsurance leaders and providers
Finalists were recognized at the awards dinner held during the annual
conclave of reinsurance executives in Monte Carlo recently. URS was
selected from a broad list of industry leaders who responded to the
Here’s what some of them had to say about URS:
“Best in the market”…
“The company offers by far the best DFA modeling – they are very innovative.”…
“The DFA model is easy to use, and if you have a question, they are always available to assist.”
URS has been nominated for the 2014 award to be presented September
14, 2014, as reinsurance execs from around the world gather for their
annual session in Monte Carlo.
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DESSON JOINS URS LONDON OFFICE
Herbert G. (Herb) Desson, a senior actuary with
broad experience in the London, Asian and U.S. markets, has joined the
London office of URS as Technical Director, CEO Alex Bushel,
announced. Desson is an Associate, Casualty Actuarial Society; a former
President, Casualty Actuaries in Europe; and currently a member of the
CAS International Issues and Asia Regional Committees.
In recent years, Desson held senior positions in Asia including Chief
Actuary for Ace Insurance Group in Thailand and Executive Director,
Thailand Actuarial Services for KPMG.
Earlier, Desson was Chief Actuary, Aon Risk Consultants Europe;
Alternative Risk Transfer Underwriter, Liberty Re, London; and Chief
Actuary, Jardine Lloyd Thompson. In the U.S. he held actuarial posts at
SAFECO, Industrial Indemnity and Great American.
“Herb brings a wealth of actuarial and business experience to our
London office where he will be responsible for the UK market as well as
other regions,” Bushel said.
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TAIPING RE – FIRST ASIAN COMPANY TO LICENSE URS ESG SOFTWARE
Taiping Re recently renewed Risk Explorer™ and became the first Asian
company to purchase the URS Economic Scenario Generator Predictable
Dynamics and the loss reserving software Res-Solver™, David Piesse, Managing Director-Asia Pacific, reported.
Taiping Re is a subsidiary of China Taiping Group and is the largest
professional reinsurance company incorporated in Hong Kong where it has
operated for 33 years. It is also a major provider of reinsurance in
China from its office in Beijing, and throughout Southeast Asia from its
office in Labuan, Malaysia. Asia Reinsurance Brokers Pte. Ltd. (ARB), based in Singapore, and the Asia Capital Reinsurance Group Pte. Ltd., one of the world’s top 50 reinsurers, also renewed their licenses for URS software.
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OUTLOOK FOR FINANCIAL RISK SOFTWARE IN ASIA
David Piesse, Managing Director-Asia Pacific,
reports that the demand for Dynamic Financial Analysis software will
grow significantly over the next few years in the region as regulatory
agencies set standards for risk based capital. “In Asia, risk management
is driven primarily by regulator approval and rating requirements. With
insurance supervisors in most Asian countries moving toward risk-based
capital regulation over the next three years, insurers will need
sophisticated financial risk software to comply,” Piesse predicts.
URS is gearing up to serve this burgeoning market. “In China, we have
completed successful training in Dynamic Financial Analysis and risk
management at Peking University working with Professor Sun, Dean of
Economics. The training will be repeated later this year. We also have
teaming agreements with Catalytics Pte. Ltd., the first wholly Asian catastrophe modeling company, and EY-Singapore
(Ernst &Young), provider of risk management, regulatory advisory
and actuarial services to the banking and insurance sectors, among
others,” Piesse notes.
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FINANCIAL RISK SOFTWARE TODAY
An interview with Anya Kutsina
Executive Director-Global Business Development
Ultimate Risk Solutions, LLC
You’ve been involved in the development of financial risk
modeling for the insurance and reinsurance industry over many years.
Large insurers generally have incorporated financial risk models into
the business planning process, but smaller companies have been slow to
adopt this sophisticated software. Do you see the vast number of smaller
companies as a growing market for URS products?
Anya: Yes. There’s no doubt, smaller companies are
beginning to recognize the importance of modeling to assess the risks
they face and plan for the future. More small companies are gearing up
to use models effectively as the insurance industry matures. The truth
is it doesn’t really matter how small or how large the company is. In
order to operate efficiently both large and small companies – especially
multi-line property/casualty insurers – need to address the same
questions and issues.
Stochastically or deterministically the small companies should come
up with a process of modeling a scenario of future balance sheets and
income statements, from one to five years into the future, reflecting
possible outcomes contingent on various strategies. In general the
assumptions would include the following:
To what extent do rates need to be increased? All at once or every six months?
How many policyholders would flee to other carriers causing a liquidity problem given the rate increases?
How many lines of business should they target for growth or exit?
How does the company’s reinsurance structure need to be revised, and how does that play out in the financials?
How do they reâ€“strategize the asset side of the balance sheet to improve cash flow?
Can they get some additional capital? How much do they need and at what cost?
Using financial risk models, they can evaluate different scenarios, instead of relying on the old “what if” approach.
My point is that small insurance and reinsurance companies with
portfolios consisting of multiple lines of business are pretty much in
the same shoes as the large carriers when it comes to financial modeling
needs. Â If my team were to start a small insurance company today,
our priority would be to build a strong modeling team (it could be a
small team) of professionals with a powerful modeling platform in order
to create the right fundamentals for growing the company.
What are the major drivers of demand for Dynamic Financial
Analysis – regulators, rating agencies or the bottom-line benefits from
understanding and quantifying the risks companies face?
Anya: The situation varies widely from country to
country, from region to region and even from state to the state in the
US. Â Â It’s difficult to generalize. There are a number of
countries where the major driving force is regulatory agencies because
overall, rates in these countries are too low, and it is extremely
difficult to expand into the different lines of business or into
different regions. However, In a number of countries the regulators are
just a formality, and the insurance market is revenue driven. In mature
markets like the US, UK and Germany there is tremendous pressure from
both regulators and rating agencies to utilize financial risk models as
part of Enterprise Risk Management. From our observation of mature
markets, the most successful insurance and reinsurance companies are
those that have the most advanced modeling tools and modeling experts.
What is URS doing to keep its flagship product, Risk Explorer™,
as the preferred model for leading insurers, reinsurers, brokers, asset
managers and governmental agencies worldwide?
Anya: Risk Explorer™ is constantly being updated by
our research and development team to be at the forefront of modeling
technology. The reality is most of our clients are companies that have
had previous experience with other DFA software products. We have found
that actuaries who compare their previous experience with models from
competitors select URS products because they are more user friendly and
Sometimes, it’s more difficult to impress new users because the
functionally of all DFA tools available in the market is pretty much the
same. However, when newcomers make product comparisons, they see the
technical and functional superiority of URS software. All I can say is
that our “buyers” are the most knowledgeable and sophisticated actuaries
when it relates to a stochastic modeling exercise. Â So, answering
your question, we are dedicated to providing the best modeling
solutions on the market and making sure that each and every one of our
clients is completely satisfied.
What are companies looking for from their financial modeling
Anya: In today’s competitive marketplace, companies
want financial modeling software that helps them plan for the future
with full understanding of the risks they face under a wide range of
scenarios. Companies that use leading edge software will be winners in
the long run.
URS takes pride in being an independent developer of DFA software. Why is this important to users?
Anya: Our clients like the fact that we have no
hidden agendas to sell other products and services. We provide objective
advice based exclusively on your needs. Our sole commitment is to
provide our clients the most advanced financial risk software in the
Anya Kutsina joined URS in 2002. She has been a
leader in bringing the Company to its present position as a preeminent
provider of financial risk software to the insurance and reinsurance
industry. Prior to joining URS, she held actuarial posts at Guy
Carpenter & Company, Aon Re and Swiss Re. Kutsina holds a M. Sc. In
mathematics and computer science from Kiev Pedagogical University in
the Ukraine and an MBA in actuarial science and finance from the College
of Insurance at
St. Johnâ€™s University.
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SOLVENCY II CERTAINTY REAWAKENS INTEREST IN FINANCIAL RISK SOFTWARE, O’GORMAN REPORTS
David O’Gorman, Managing Director for Iberia and Latin
America, reports a surge of interest on the part of Spanish and
Portuguese insurers in adopting Dynamic Financial Analysis (DFA)
software now that Solvency II is scheduled to go into effect January 1,
“Certainty over the implementation date after lengthy delays has caused
many companies to restart their plans to adopt DFA models, and we’re
engaged with a number in providing Risk Explorer™ along with other URS
“Many companies are also considering switching to URS after years of
frustration with competitors’ software, caused by a number of factors
including difficulty of use, key-man dependencies, lack of ownership and
consulting costs to name just a few,” O’Gorman said.
“The fact that we are an independent provider with no agenda other than
providing the best software is presenting a real and attractive
alternative to their present solution,” he added.
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Risk Explorer™ – A powerful, flexible, user-friendly Dynamic Financial Analysis tool used for:
- Portfolio risk management
- Maximizing efficiency of ceded reinsurance or retrocession programs
- Full financial statement modeling, evaluating volatility of financial results
- Determining economic capital requirements, capital allocation
- Asset-liability matching, cash flow analysis
- Ceded reinsurance cost allocation
- Measuring performance of various segments of a company
- Data interchange with other applications such as catastrophe models and Microsoft Excel
- Solvency II compliance
- Developing Enterprise Risk Management Programs
Risk Explorer™ Express Edition – A Dynamic Financial Analysis tool designed to meet the needs of regional, mid-size and smaller insurers and reinsurers:
- Incorporates many features of Risk Explorer™ simplified and tailored to serve the middle market
- Affordable tool for portfolio modeling, regulatory compliance,
reinsurance analysis and other uses for companies that do not require
the extensive functionality needed by large corporations to build much
bigger and more complex models
- Fully specified, integrated asset-liability modeling platform
- Cost effective model to meet rating agency and regulatory standards
Predictable Dynamics – Global economic model that simulates the behavior of main economic variables in multiple economies.
- Allows planners to test strategic alternatives under many possible, future economic scenarios
- Reliable model of economic environment for design of risk mitigation and hedging strategies
- Invaluable for evaluating policy options in many different settings
- Useful tool for business decision makers, government agencies, regulatory bodies and financial institutions
- Simulates large numbers of stochastic economic scenarios for GDP
growth rates, inflation, unemployment, wage growth, exchange rates,
stock market indexes and other variables
UltiFit™ – Sophisticated distribution-fitting software that helps parameterize statistical models.
- Finds suitable distribution parameters that account for real world constraints and data limitations
- Short and long-tailed distributions for modeling
- Practical support for model calibration using available data
- Helps assess quality of fitted models by estimating uncertainty for each fitted distribution
Asset Portfolio Optimizer – New software to help companies analyze risk portfolios and decide on the most effective allocation of assets.
- Enables users to determine the optimal mix of assets to hold in
order to meet future obligations and maximize return in accordance with
their risk appetite during the modeled future period.
- Can be licensed as a separate payable service or combined with Risk
Explorer™ or other URS products to determine the optimal asset mix for a
company’s portfolio of liabilities
- Users can specify various constraints within which the optimization
takes place and the Optimizer will deliver a number of optimal
portfolios, maximizing the return for a given risk or vice versa.
- Uses the standard output from a company’s internal model to optimize
its asset portfolio mix, taking into account the unique features of the
company’s insurance liabilities.
Translator++ for Excel – Unique spreadsheet compiler that converts Excel models into fast running-executable programs.
- Used to extend and customize the functionality of every part of Risk Explorer™ to meet the most exacting model requirements
- Ability to create new, custom risk models, reinsurance arrangements
and other custom components using calculations contained in Excel
- Translates complex calculations from Excel to fast machine code that runs up to hundreds of times faster
- Can integrate own financial models, algorithms and third-party software into Risk Explorer™ models
Res-Solver™ – Advanced deterministic and stochastic loss-reserve estimation and modeling framework.
- Enables companies to improve loss reserve estimation and gain better understanding of the uncertainty in reserves
- Makes automatic triangle data adjustments for loss cost trends and exposure changes
- Stochastic Decay Model produces a predicted development path to ultimate values
- Quickly produces point estimates (expected values) or stochastic
simulations of loss reserves and future cash flows from past losses.
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OUR CLIENTS INCLUDE THESE INDUSTRY LEADERS
Willis Re, Inc
And Many More Worldwide
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