The ALM model of Ortec Finance offers a solution

Insurance companies increasingly like to perform risk management in-house. They want to be in control themselves, driven of course partly by the requirements of the supervisor and the fact that Solvency II took effect on 1 January 2016. Issues like the Own Risk and Solvency Assessment (ORSA) or drawing up of more periodic risk monitor reports demand that the insurer keeps greater direction over the process. Insurers who use the risk management models of Ortec Finance ensure that knowledge is much better secured within the organization. Our ALM / ORSA model offers you support in various aspects of your risk management process.

ALM study and ORSA analyses

The ALM study is usually the starting point of the risk management process, by forming the strategic (basic) policy. The ORSA analyses can then start from the same basic policy determined by the ALM study. By modelling and analyzing different worst case scenarios within the ORSA framework, you can subsequently determine what impact the various extreme scenarios will have on the risk and return measures established by you. We make this entire process, consisting of both the ALM study and the ORSA analyses, understandable through our ALM / ORSA model based on stochastic scenario analysis. By projecting the balance sheet, the profit & loss account and, for example, the entire structure of the Solvency Capital Requirement (SCR) into the future (for a few thousand economic scenarios), you will on the one hand gain good insight into the development of return for your organization, and on the other hand insight into the risks that accompany certain kinds of policy (or worst cases).

Risk reports

We also notice that clients increasingly draw up risk reports with the aim of mapping and monitoring the development of important variables. After the strategic policy has been established, it is of great importance to monitor the impact of market conditions closely (possibly in combination with the ORSA worst case scenarios) and if needed take timely action. By understanding the impact of various scenarios on your organization – for example, by including multiple sensitivity analyses in the report – you have fewer worries. And you will likely sleep a bit easier when you know that your organization is able to withstand, for example, certain shocks to the stock market and that they, while never enjoyable of course, will in any case bring no huge risks with it.

How Ortec Finance can help

By operating the ALM / ORSA model of Ortec Finance in-house, your organization is able to manage the quantitative issues in your risk management process independently. This independence goes hand in hand with continuous support from Ortec Finance. We always make sure our models are fully up-to-date regarding, for example, the Solvency II framework. In addition the skills and expertise of our risk ALM specialists will remain available to you. Your Ortec Finance account manager is ready to support you and your organization in case of questions or the need to deliberate certain issues. One can also appeal to Ortec Finance in a review role. Many of our clients find this very pleasant. In this way we will continue to serve as a partner to your organization.

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