The strategic partnership builds on the success of Algorithmicsâ innovative risk management solutions for insurance companies, in particular its award-winning replicating portfolio techniques, and Barrie & Hibbertâs market-leading Economic Scenario Generator (ESG) and industry expertise.
The new solution will benefit insurance companies of all sizes that wish to take a robust approach 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; it includes comprehensive financial modeling, risk aggregation, standardized replicating portfolios for all major markets, market data and updated economic scenarios.
Dr Andrew Aziz, Executive Vice President of Risk Solutions at Algorithmics, said: âThis strategic partnership formalizes our strong working relationship with Barrie & Hibbert developed during projects for major European insurance companies. Together, we provide a market leading service which will accelerate the industryâs ability to meet the internal models approach under Solvency II and, importantly, allow individual clients to leverage their mandatory investment in compliance, to the benefit of the daily management of capital in their business.â
Andrew Barrie, Executive Director and Founder, Barrie & Hibbert, added: âMany insurers already have strong processes, using our scenario generation models, 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 âreal timeâ risk management. Working with Algorithmics will mean that insurers will get a market leading solution to the challenges of building their ERM frameworks.â
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.