Over the past ten years, risk management has been given a central place on the management agenda. That's totally understandable, because risk management is a broad term and the term ' risk ' could pop up in almost each item on the agenda. Investments or other financial-related risks are still foremost, but management nowadays needs to anticipate a multitude of risks that can be actively managed. This presents them with a serious challenge. The Ortec Finance Risk Navigator offers a new, interactive form of reporting which is able to handle the challenges of modern risk management and can be done completely in-house by the insurer.

Not only look back, but look ahead too

Insurers are accustomed to analysing their current situation. This includes a lot of attention to mapping recent history: where are we now, and how have we arrived at this point? It’s more difficult to understand future developments. How big is the risk that you cannot pay dividend in the next period? What about the volatility of your equity? How real is the chance that the Solvency II ratio falls below certain limit values? What is the future potential for Free Capital Generation?

The OF Risk Navigator provides insight into future strategic risks in a way that allows them to be actively managed. Advanced what-if analyses determine how solvency and other factors develop in dynamic economic scenarios. They also indicate how adjustments can be made, e.g. by investing in more or fewer risky assets or by adjusting the interest hedging policy. This enables a robust optimization of the investment policy in realistic economic scenarios and allowing for the dynamics of the Solvency II regulatory framework (including, for example, the dynamics of the volatility adjustment).

Ortec Finance Risk Navigator

Overkill of information is not beneficial to the overview. The quantity and size of existing reports and analyses can cause the core of risk management to be lost. The OF Risk Navigator provides a clear framework in which risks that originate from different sources are consolidated, and which periodically indicates when and how adjustments can best be made. Sources can be your own systems, but also service providers like a fiduciary manager, asset manager or custodian. The forward looking risk analysis and performance analysis can be performed in-house with Ortec Finance technology. The OF Risk Navigator states all risks and also suggests appropriate management actions. In addition, the report has a clear signalling function so that timely adjustments can be made. The OF Risk Navigator has a modular design and can be fully structured according to your own requirements. In addition, it’s available on tablets in an interactive format.

Evaluation of strategic policy

In its most basic form, the OF Risk Navigator delivers a report that enables management to evaluate the strategic policy and risk framework and recalibrate it. This takes place at least once every three years during an Asset Liability Management (ALM) study. Developments in financial markets and the business cycle, changed economic expectations, and changes in the insurer’s financial position could cause the strategy adopted during the ALM study to no longer be fully in line with the objectives. The OF Risk Navigator can execute a what-if analysis and sensitivity analysis of these objectives on the basis of the most recent financial and economic situation. This enables management to make timely adjustments, substantiate the relevant decisions and justify these to stakeholders. This evaluation can take place at yearly, half-yearly, or quarterly intervals. As a result, the evaluation can also provide guidance for determining the annual investment plan.

Integral risk management

The OF Risk Navigator has extensive application options and it takes into account components like SCR, UFR and VA. The OF Risk Navigator not only evaluates the strategic risks, but can also contain modules that further examine other related risks. This includes monitoring of the risk budget and evaluation of various financial risks, e.g. interest rate, inflation, currency, and credit risks. With the OF Risk Navigator, you can consolidate all this information from various risk sources. Thus the report, through the dashboard and menu, clearly and completely presents the entire risk spectrum.

If desired, in addition to the financial risks the OF Risk Navigator can also offer reports on non-financial risks and supervision-related topics. Nowadays, such topics are an important part of integral risk management. The OF Risk Navigator ensures that all this information is clearly consolidated and can be made available through an interactive report.

Robust ALM-model

The OF Risk Navigator derives much of its power from the underlying robust ALM-model 'GLASS'. The option is available to execute the total risk navigator, including the forward looking risk analysis, in-house with Ortec Finance technology.  This provides a number of proven benefits:

  • Integrated solutions for liabilities, investments and economic scenarios
  • State-of-the-art economic scenario generator, both for monitoring and strategic analysis
  • Full and consistent stochastic balance projection for ALM and ORSA
    - We can deliver consistency throughout the risk management process (from ALM and ORSA to risk monitoring) by using our dynamic economic scenario generator which provides realistic economic scenarios in the short, medium and long term.
  • Projections include the underlying SCR-components and the development of the Solvency II ratio
    - You can develop and evaluate policy simultaneously with the standard Solvency II model and a (partial) internal model
    - In the simulation, you can evaluate a stochastic Volatility Adjustment, giving you insight into the impact that the VA has on your solvency position in different stress scenarios
  • Our liability modelling is consistent with your internal systems
  • Our Option Interpolation Model projects embedded option values fast and compatible with in-house valuation methods

Want to know more?

Would you like to find out more about the extensive possibilities of the OF Risk Navigator or are you interested in receiving the full version of the demo report? Please contact Reinier Hessels.


Reinier Hessels
Senior Consultant
+31 20 700 97 63

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