Aon Benfield Launches Updated Financial Analysis Tool – ReMetrica v6

September 18, 2012

Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc, announced the launch of version 6 of ReMetrica – its dynamic financial analysis tool. The bulletin said it would “reduce model size by up to 95 percent, when tools are becoming increasingly complex in a Solvency II world. In addition, the latest version helps insurers more accurately model credit risk in today’s uncertain economic environment.”

ReMetrica v6 features major updates resulting in enhanced functionality for actuaries to make building and running models easier and faster. Aon Benfield said these include:
— Super-components that reduce the size of the model to just 5 percent in some cases, to cut down on the complexity of modeling
— High performance computing (HPC) support for larger models enabling faster run times with sophisticated job management facilities

It also indicated that the new version enables a more accurate assessment of insurers’ credit risk. The announcement explained that traditionally, “credit risk has been modeled on the likelihood of counterparties as a whole defaulting.

“However, with the growing need to better grasp counterparty risk due to today’s unsettled global economy and regulatory pressures, ReMetrica v6 assigns a rating to each counterparty, which can evolve stochastically. This in turn can help companies adapt their risk mitigation strategies.”

Paul Maitland, international head of ReMetrica at Aon Benfield Analytics, explained: “Capital models are becoming increasingly large in scale as insurers respond to regulatory and rating agency pressures, coupled with their own internal pressures to manage risk according to their appetite and tolerance levels.

“Left unchecked, capital models may become overly complex. We continue to refine ReMetrica to meet an increasing level of stakeholder demand without increasing the complexity of modeling in ReMetrica. In short, these improvements are designed to make the work of the modelers faster and more efficient, but still maintain the accuracy and transparency of results.”

ReMetrica v6 builds upon recent Solvency II-focused enhancements to help insurers and reinsurers meet the proposed regulatory requirements, including the ORSA, and to enable more effective reporting for the Lloyd’s market.

Source: Aon Benfield

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