Algorithmics and Barrie & Hibbert announce strategic partnership to deliver the insurance industry with economic capital solutions under Solvency II

Toronto, ON - 17 June 2009

Algorithmics and Barrie & Hibbert, leading vendors in enterprise risk management and economic scenarios respectively, today announced they have formed a strategic partnership to provide a comprehensive solution to insurance companies to allow them to measure, manage and report on economic capital management under Solvency II regulations.

The strategic partnership builds on the success of Algorithmics’ innovative risk management solutions for insurance companies, in particular its award-winning replicating portfolio techniques, and Barrie & Hibbert’s 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: “This 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 industry’s 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.”

Andrew Barrie, Executive Director and Founder, Barrie & Hibbert, added: “Many 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 ‘real time’ risk management. Working with Algorithmics will mean that insurers will get a market leading solution to the challenges of building their ERM frameworks.”

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.

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