Insurance Consulting – Capital Assessment
Underlying our approach to financial risk management is a sense of realism that we cannot know the future but can only prepare for it. Our aim in working with our clients in assessing their capital requirements is to help them arrive at a greater understanding of the risks they face, to make informed decisions about the management of those risks and the capital that they must ultimately hold against the risks they choose to retain.
We have developed sophisticated tools that combine business-specific data, industry benchmarks and subjective underwriting opinion (on what has not yet been observed, such as extreme losses and future claims trends) to populate a bespoke model of each business’s risk profile. We continue this collaborative and transparent approach in assessing the degree of dependency between different types of risks and business lines, to arrive at an overall capital assessment.
Central to this approach is the development of bespoke models that capture the unique aspects of our clients’ portfolios. We use simple language to explain sophisticated stochastic techniques, to build understanding and our clients’ confidence in their results. We believe that it is our responsibility to communicate our ideas to achieve this.
We have developed an innovative, flexible claims model, based upon the hyperbolic tangent function (tanh) to better fit the data - “We fit the curve to the data, not the data to the curve”. We continue to review and refine our approach in this important and developing area, updating our models to enhance their usability and to reflect new regulatory guidance and emerging best practice.
