Moody’s Analytics developed the solution using enterprise technology to help users meet the high performance requirements for economic capital calculations. The solution also helps insurers to create enhanced audit trails in support of regulatory reporting.
“Implementation of global solvency regulations continues to be a key business priority for insurance companies,” said Andy Frepp, Managing Director of Moody’s Analytics Insurance Solutions. “Moody’s Analytics has responded to the need for intuitive economic capital modelling by creating a cutting edge Monte Carlo solution that allows management to embed capital metrics into day-to-day operations.”
The B&H Economic Capital Calculator has been designed to reduce implementation costs and can be fully integrated within existing production processes. This is particularly important for employing what-if analysis in support of informed business decision-making.
When the B&H Economic Capital Calculator is used in conjunction with B&H Risk Scenario Generator and B&H Proxy Generator, Moody's Analytics Capital Modelling Framework provides an end-to-end capital modelling solution that can be used to meet regulatory requirements or internal management purposes. Together, these solutions will help insurers use risk based metrics to better manage their capital position and how it might evolve.
About Moody's Analytics
Moody’s Analytics helps capital markets and risk management professionals worldwide respond to an evolving marketplace with confidence. The company offers unique tools and best practices for measuring and managing risk through expertise and experience in credit analysis, economic research and financial risk management. By providing leading-edge software, advisory services and research, including proprietary analyses from Moody’s Investors Service, Moody’s Analytics integrates and customizes its offerings to address specific business challenges. Moody's Analytics is a subsidiary of Moody's Corporation (NYSE: MCO), which reported revenue of $2.7 billion in 2012, employs approximately 6,800 people worldwide and has a presence in 28 countries. Further information is available at www.moodysanalytics.com
]]>In order to accelerate and optimise their calculations, a number of insurers and mutual firms have asked Barrie & Hibbert for the calibrations and scenario sets they need for assessing the impact of the measures considered within the LTGA. These include:
Barrie & Hibbert is now delivering calibrations and scenario sets, both at the reference date of the LTGA and the historical sensitivity dates, to allow the LTGA participants to complete their studies within the very short time frame stipulated by EIOPA. These calibrations will cover multiple asset classes and will be aligned with the specifications published by the EIOPA.
Insurers who wish to receive deliveries or advice to help them complete submission of calculations on time, should contact their relationship manager at Barrie & Hibbert.
]]>The following papers have now been published and are available for download:
This paper was commissioned by the Institute and Faculty of Actuaries (together with a paper on a related topic by PwC). Our paper researches the application of market-consistent valuation and risk-based capital techniques to the analysis of the security of DB pension fund promises. In particular, the paper focuses on how a DB pension fund sponsor’s commitment to funding pension fund deficits can be valued as a credit-risky asset on the pension fund ‘holistic balance sheet’.
The European Insurance and Occupational Pension Authority’s recent Quantitative Impact Study on the funding of occupational pensions and the potential treatment of sponsor support has made this a topical issue for DB pensions in the European Union. And with aggregate DB pension fund deficits in North America and Europe at record highs, the economics of sponsor support has perhaps never been more relevant. But a rigorous approach to a market-based value for sponsor support – generally a long-term, credit-risky and path-dependent cash flow stream – is a demanding challenge that makes full use and more of the techniques developed in actuarial risk management in the global insurance sector in recent years.
The report can be downloaded from the Faculty's website.
In this paper we address a technical issue that arises when a 1-year VaR economic capital measure is calculated using instantaneous balance sheet stresses. Specifically, the paper shows how 1-year risk factor probability distributions should be adjusted for application to ‘time-0’ balance sheet re-valuations in order to produce the intended 1-year VaR capital estimate. Read it now
If you have any feedback on these papers or would like to discuss them further with us, do get in touch. Similarly, if you have any suggestions on topics you would like this series to address, we would be very pleased to hear them.
]]>For the third time, Barrie & Hibbert has claimed the award for Best ESG 2012 in Insurance Risk magazine’s awards.
On receiving the award Andy Frepp, Chief Executive, stated, “We are delighted to win this award. The market for sophisticated, and easy-to-use risk management solutions has become increasingly competitive and to receive such an accolade confirms that the Barrie & Hibbert ESG together with our approach to its ongoing development aligns very well with the needs of insurers for speed, efficiency and reliable methodologies to help them meet regulatory and market challenges.”
On speaking about the judging process, Michael Faulkner, Editor of Insurance Risk stated, “Clients and those who know Barrie & Hibbert praised the “state of the art” models, particularly interest rate and equity models, as well as the quality of the documentation and log files. The flexibility to reflect in-house views where appropriate and the flexibility to run both on a market consistent and a real world basis were also highlighted by the firm’s customers.” Faulkner also added, “The quality of the customer support was also highly rated by clients.
Insurance Risk Magazine
The publication has been running the awards over many years. Winners were announced at an awards ceremony in London on 10th October 2012. Barrie & Hibbert previously received the award in 2009 and 2010. Editorial coverage of the award, can be viewed here. Information on award winners will be published at www.risk.net.
Further information
Isabel Gillies, Marketing Communications Manager,
Tel: +44 (0)131 221 3250 Isabel.gillies@barrhibb.com www.barrhibb.com
]]>Hear industry experts give their views on the latest trends influencing capital modelling, and the investment challenges facing P&C insurers. Over breakfast you will have a chance to network with other industry professionals, followed by several brief presentations. Our speakers will explore how enterprises can leverage an economic scenario generator within a P&C capital model. We will also discuss evolving investment strategies.
Commencing with a networking breakfast at 8.30am and finishing at 11am.
The venue is London's iconic Tower 42.
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Whilst many insurers in Germany and elsewhere in Europe are occupied with ensuring Solvency II compliance using the standard approach and the requirements of local regulators, Thomas Gleixner of risk modelling company, Barrie & Hibbert, believes that many of these organisations are perhaps missing the broader aspects of Solvency II including the important link between risk management and strategic decision making.
Addressing an audience of senior insurance professionals at the 9th Handelsblatt Jahrestagung Solvency II in Cologne last week, Gleixner stated, "Solvency II is not only about implementing the standard approach and reporting the results. Insurers are beginning to adopt ORSA (Own Requirement Solvency Assessment) as a means of generating and using better information resources across different lines of business. Many of them view this as a real opportunity to achieve better, consistent and more informed decision making across the entire organisation.
"Of course," continued Gleixner, "many will continue to see managing and limiting risks as the only role of risk management, but the idea of a more holistic approach is gaining ground because common risk limit systems and standard formula calculations are not in themselves sufficient to inform successful business strategies."
Gleixner ended by putting forward a multi-time step / medium-term framework based on clear principles to project both market risks and expected returns as a way of creating the information and insights that are required to ensure more strategic risk and capital management.
Further information
Isabel Gillies, Marketing Communications Manager,
Tel: +44 (0)131 625 0308 Isabel.gillies@barrhibb.com www.barrhibb.com
]]>Liability proxy modelling is the subject of a forthcoming breakfast briefing to be hosted by Barrie & Hibbert in Toronto on 11 July. Co-sponsored by the Canadian Institute of Actuaries, the event is a must for industry professionals looking to adopt best practice approaches to risk and capital management.
New techniques for modeling liabilities
Benefits from this event
From our case study, you will hear how industry leaders have leveraged benefits from adopting this cutting-edge approach, and obtain practical ideas on how you can implement these in your own organisation.
Attendance may also count towards CPD credits from the Canadian Institute of Actuaries.
]]>Barrie & Hibbert, a Moody’s Analytics Company, announced today that it has received the Queen’s Award for Enterprise in International Trade, the UK’s most prestigious award for business performance. The award recognises UK businesses that have achieved a substantial and sustained increase in export earnings over three years, to a level which is outstanding for the products and services concerned.
Barrie & Hibbert’s strong track record of growth across 30 countries with exports growing to more than half of turnover was a key factor in the decision.
“This award is great recognition for the focused efforts of the whole Barrie & Hibbert team who have worked hard to expand the global reach of the business while coping with the unique demands of the global financial sector,” commented Andy Frepp, CEO at Barrie & Hibbert
Established in 1995, Barrie & Hibbert provides risk modelling solutions to the global financial services industry. Acquired by Moody’s Analytics in 2011, the company has over 150 customers in 30 countries, with over 60% of insurers in the global fortune 500 using its products and services.
Recognised as the market leader and experts in their field, the company’s commercial success has been founded on this specialist knowledge and its unique placement within the global insurance sector.
“It a great honour to receive the Queens Award for Enterprise in International Trade, particularly in the diamond Jubilee year. I would like to thank our entire team for their expertise, commitment and dedication, without which we could not have received this prestigious award.” said Frepp.
Following its acquisition by Moody’s Analytics, Barrie & Hibbert will continue to extend its international activities which will further enhance its specialist knowledge of global financial markets. It continues to provide challenging and rewarding career opportunities in Edinburgh, London, New York and Hong Kong.
Notes for Editors
Established in 1995 and acquired by Moody’s Analytics in December 2011, Barrie and Hibbert provides world-class stochastic modelling solutions to financial services clients around the globe. As part of Moody’s Analytics, it remains committed to the founding principles of delivering state-of-the-art modeling tools to help insurance, pensions, and advisory clients to identify, quantify and manage financial risks. Working together, Moody’s Analytics and Barrie & Hibbert are developing a broader more powerful library of financial models and risk solutions that can be used to understand the complicated financial relationships that drive the financial management problems of our clients.
Barrie & Hibbert currently have offices in Edinburgh, London, New York and Hong Kong.
For further information: www.barrhibb.com
About Moody’s Analytics
Moody’s Analytics helps capital markets and risk management professionals worldwide respond to an evolving marketplace with confidence. The company offers unique tools and best practices for measuring and managing risk through expertise and experience in credit analysis, economic research and financial risk management. By providing leading-edge software, advisory services and research, including the proprietary analysis of Moody’s Investors Service, Moody’s Analytics integrates and customizes its offerings to address specific business challenges. Moody's Analytics is a subsidiary of Moody's Corporation (NYSE: MCO), which reported revenue of $2.3 billion in 2011, employs approximately 6,100 people worldwide and maintains a presence in 28 countries.
Further information is available at www.moodysanalytics.com.
]]>Insurers are coming under ever increasing pressure to find the time and resources needed to comply with the complex demands of Solvency II. The sheer computational intensity, for instance, of running an internal model; and the requirement to be able to justify model assumptions to regulators, has caused many insurers to look for new more efficient ways of working.
Barrie & Hibbert is proud to announce the launch of its Next Generation Solutions designed to help insurers work faster and smarter in today’s high pressured environment.
Over the next twelve months we will be releasing a range of new products, each of which will comprehensively address particular business challenges. Clients will be able to choose whichever product is suitable for them, adding on additional products as their requirements change. The first products launched today are:
Speaking at today’s launch, Brian Robinson, Life Principal Product Manager, Barrie & Hibbert stated, “These solutions consign to history many of those laborious resource-heavy routines that are often prone to inaccuracies. They provide access to an integrated suite of new and enhanced products and services in a way that introduces greater functionality, speed reliability and automation.”
Notes for Editors
Established in 1995 and acquired by Moody’s Analytics in December 2011, Barrie and Hibbert provides world-class stochastic modelling solutions to financial services clients around the globe, helping them to evolve their business performance so that they can succeed in a complex and increasingly volatile market.
As part of Moody’s Analytics, we remain committed to our founding principles of delivering state-of-the-art modelling tools to help insurance, pensions, and retail clients to identify, quantify and manage the financial risk in savings and investment products, institutional portfolios and life and pensions balance sheets. Working with Moody’s Analytics we are developing a broader more powerful library of financial models and risk solutions that can be used to understand the complicated joint financial relationships that drive uncertainty in long-term financial plans.
We currently have offices in Edinburgh, London, New York and Hong Kong to provide sales, consultancy and support across the globe.
For further information: www.barrhibb.com/next
]]>Moody’s Corporation Acquires Barrie & Hibbert
NEW YORK, December 16, 2011 -- Moody’s Corporation announced today that it has acquired Barrie & Hibbert Limited, a leading provider of risk management modeling tools for insurance companies worldwide.
The acquisition broadens Moody’s Analytics suite of software solutions for the insurance and pension sectors. With more than 150 customers around the world, Barrie & Hibbert’s Economic Scenario Generator (ESG) is widely recognized as an industry standard for valuing and projecting assets and liabilities and assessing risk and capital positions.
In addition, Barrie & Hibbert’s offerings and expertise in understanding the risks in long-term asset and liability management will enhance Moody’s data management, capital calculation and regulatory reporting platform, to further meet the needs of institutions as they undertake risk management and regulatory compliance activities.
“Barrie & Hibbert has built a strong reputation for its specialized expertise and unique product offerings for insurance risk management,” said Mark Almeida, President of Moody’s Analytics. “Adding Barrie & Hibbert’s skills and experience to Moody’s Analytics expands our ability to help insurers meet worldwide solvency modernization initiatives including Solvency II and other regulatory challenges, and reinforces our commitment to assisting financial institutions as they address a growing array of risk management needs.”
“We are pleased to be joining a dynamic organization that is recognized as a global leader in helping financial institutions manage risk. The combination of Moody’s Analytics and Barrie & Hibbert will benefit our clients by providing them with a broader and more robust set of tools and services to assess financial risk and respond to regulatory requirements,” said Andy Frepp, CEO of Barrie & Hibbert.
Moody’s purchased Barrie & Hibbert for GBP 50 million (USD $77.6 million), and the acquisition was funded from cash on hand. Reflecting the unfavorable impact of purchase accounting and integration costs, the transaction is expected to be several cents dilutive to Moody's GAAP earnings per share in 2012.
Based in Edinburgh, Scotland, Barrie & Hibbert will be integrated into the Moody’s Analytics Risk Management Software segment, which includes a range of award winning products used by financial institutions around the world.
About Moody’s Corporation
Moody's is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. Moody's Corporation (NYSE: MCO) is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which offers leading-edge software, advisory services and research for credit and economic analysis and financial risk management. The Corporation, which reported revenue of $2.0 billion in 2010, employs approximately 6,000 people worldwide and maintains a presence in 27 countries. Further information is available at www.moodys.com.
Contacts:
Michael Adler
Vice President
Corporate Communications
+1 212-553-4667
michael.adler@moodys.com
Salli Schwartz
Vice President
Global Head of Investor Relations
+1 212-553-4862
sallilyn.schwartz@moodys.com
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for Moody’s business and operations that involve a number of risks and uncertainties. Moody’s forward-looking statements in this release are made as of the date hereof, and the Company disclaims any duty to supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying certain forward-looking information regarding, among other things, the acquisition by Moody’s of Barrie & Hibbert. Actual events or results may differ materially from those contained in these forward-looking statements. Important factors that could cause future events or results to vary from those addressed in the forward-looking statements include, without limitation, risks and uncertainties arising from the ability of Moody’s to successfully integrate the Barrie & Hibbert business into its operations, to successfully retain customers and key employees of Barrie & Hibbert and to implement its plans, forecasts and other expectations with respect to Barrie & Hibbert’s business after the transaction and realize additional opportunities for growth and innovation; uncertainties relating to the ability to realize the expected benefits of the acquisition; unanticipated or unfavorable regulatory matters; general economic conditions in the regions and industries in which Moody’s and Barrie & Hibbert operate; and other risk factors as discussed in the Company’s annual report on Form 10-K for the year ended December 31, 2010 and in other filings made by the Company from time to time with the Securities and Exchange Commission.
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ARAG, the largest family-owned insurance company in Germany and one of the two largest providers for legal protection insurance worldwide has selected Barrie & Hibbert for its internal model for market risk, and for quantifying strategic asset allocation opportunities in a Solvency II environment.
Internationally recognised as an independent partner for justice and protection, ARAG offers a broad range of insurance products in Germany and is Europe’s largest sports insurer. Customised legal protection is sold in 13 European markets and also the United States.
Wolfgang Mathmann, Head of Group Risk Management commented, “A number of factors convinced ARAG that Barrie & Hibbert has the right solution for our business. Apart from the company’s track record and reputation as the market leader in this area, we were particularly impressed by the dependency structure. The calibrations offered by Barrie & Hibbert extend across all economies in which ARAG has investments, so this too was an important selling point for us.”
Thomas Gleixner, Regional Manager CEE added, “We are delighted to be working with ARAG and welcome them as a new member of our German client group. ARAG’s commitment to enhancing its asset and liability modelling capabilities is evident. Barrie & Hibbert’s highly sophisticated models and calibrations are ideal to complement the company’s effort in this area. At a time of high market volatility, insurers need realistic projections to manage their risk, whether they have partial or full internal models. In the run up to Solvency II and beyond, Barrie & Hibbert’s solutions will be instrumental in helping insurers manage that risk.”
Notes for editors
The ARAG Group
The ARAG Group is the largest family-owned company in the German insurance industry. As a versatile quality insurer with a focus on legal insurance, ARAG relies on a segment mix that is entirely in line with its historical background and expertise. The basis is provided by highly productive subsidiaries in the German composite, health and life insurance business as well as ARAG’s international subsidiaries and affiliates in 12 other European countries and the USA – many of which hold leading positions in their respective legal insurance markets. With nearly 3,500 employees, the Group earns revenues and premiums of nearly € 1.5 billion.
For further information visit: http://www.arag.com
Market volatility, low interest rates and increased longevity are impacting drawdown income levels. Barrie & Hibbert’s new Drawdown Review Analyser helps advisors present the options to retirement customers, and deliver a valued and efficient drawdown review service. Read more
]]>See how B&H solutions can enhance your own pension proposition
Länsförsäkringar, which is the largest non-life insurance and fourth largest life insurance group in Sweden, has selected Barrie & Hibbert’s Economic Scenario Generator (ESG) to be used within Länsförsäkringar’s Solvency II Internal Model. The Länsförsäkringar group includes 23 local mutual non-life insurance companies which cover all parts of Sweden, a life insurance company, a bank and a real estate agent company. Länsförsäkringar provides products and services to more than 3.3 million customers. Barrie & Hibbert’s ESG will be used in the Solvency II internal model of Länsförsäkringar Life and Länsförsäkringar Non-life.
Jakob Carlsson, Chief Financial Officer of Länsförsäkringar Life: “Länsförsäkringar Life has high ambitions for its Solvency II Internal Model which will be at the centre of our business decision making process. We believe our model will give us a competitive advantage since it strengthens risk management and enables more efficient use of capital. The Barrie & Hibbert ESG provides best practice models for financial markets, and will help us achieve our goal.”
Viktor Knava, Regional Manager – EMEA of Barrie & Hibbert, adds: ‘This partnership further demonstrates the commitment of our team to the Nordic market. We will be working very closely with Länsförsäkringar to ensure they meet their business objectives through the implementation of Solvency II.’
Editor's Notes: