Company: Benfield
Product: ReMetrica
Web site: www.benfieldgroup.com
Benfield, an independent reinsurance intermediary, has issued a new release of its ReMetrica product, a dynamic financial analysis (DFA) modeling tool. Version 4.0 offers increased flexibility and sophistication for a wide range of modeling applications. The functionality will assist companies in responding to the developments in risk-based regulation around the world.
GE ERC uses ReMetrica as the technical platform for the reinsurers risk model and plans on using the new version, according to Don Mango, director of research and development for GE ERC. It also is used to evaluate outbound reinsurance purchasing decisions in both our primary division and our reinsurance division, he says.
The upgraded release contains a number of new features for simulating underwriting risk, reserving risk (both retrospective and prospective), reinsurance credit risk, and investment risk. Companies can view their results by accident year, underwriting year, and calendar year and observe risk emerging in a way consistent with their own reserving approach.
GE ERC has found the ReMetrica product to be very intuitive, Mango says. It has outstanding reinsurance modeling support in it, he notes. We think the way ReMetrica has integrated Excel as the output receptacle is unique from what weve seen [of other products]. That has been very appealing to all the users. The graphical nature [of the solution] has made communicating the model setup easier than Ive seen in other products. The ability to drill down, go up and down inside a structure, and encapsulate models into individual blocks gives us a high-level picture.
The software enables users to view their results simultaneously under different accounting standards. There also are new features that simplify the creation and maintenance of large models, including the ability to manage all of a models parameters through a centralized database.
The new Version 4.0 runs on a range of operating systems including Windows 98, NT 4, Windows 2000, and XP and also includes Visual Basic for Applications for writing macros in a similar way to Excel.
Paul Maitland, head of risk software at Benfield, says, Regulators around the world have been looking at how insurance companies fail. They have found the current formulaic approach of the ratios of claims to premiums often is the last sign a company is in trouble. As a result, regulators now are looking at ways to prevent future failures by ensuring management is monitoring risks more effectively. In particular, the forthcoming regulations will be looking for managers to demonstrate they have sufficient capital for the risks they are exposed to. This requires modeling of the risks and a clear understanding of the assumptions used.
Originally launched in 2000, ReMetrica is a modular product that allows users to create quickly and easily custom-made models by linking together standard components, without programming, from the large product library that represents the business process. This modularity also improves the ease with which models can be audited, amended, and expanded. The software enables users to model large company portfolios across multiple business lines and territories looking many years into the future, combining the speed of a compiled simulation engine with the flexibility of a spreadsheet, according to Maitland.
In addition to its flexibility, the system offers a fully graphical user interface, on-screen help, and a comprehensive user manual with examples of business cases. Users are backed up with full technical and business support based on the experience gained through Benfields extensive in-house use of the system. The software is robust, scaleable, and transparent, and every stage of a calculation can be tracked.
Benfield has a record of doing significant improvements on the model on an annual basis, says Mango. We expect some significant improvements in the business information handling.
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