Account for your asset-liability profiles in customary capital adequacy frameworks
Given the current low-yield market and extreme market volatilities, insurance companies face problems such as:
1. Managing assets dynamically based on liability profiles when the old way of achieving a fixed annual excess return may no longer be unrealistic
2. Mitigating the potential negative impacts of major market shocks
3. Maximizing the probability that the assets will exceed the liabilities on pool termination date
4. Reporting such facts in a scientific defensible way as required by regulators
5. Provide ways to simulate “regime” changes with drastically different parameters, such as the impact on mortality assumptions due to an infectious disease pandemic
Here at HedgeSPA, we offer a professional asset management platform with a professional team that have successfully solved similar problems for the world’s largest insurers:
- Our AI-enhanced platform supports multi-asset support multi-asset investing which is typically how insurers invest, and can handle tricky issues like assets with multi-frequency reporting in a scientifically rigorous manner
- Our platform also offers a wide range of asset-liability functionalities starting from estimating liability profiles from the insurance pool and Basel II style capital adequacy numbers
- Our platform is designed to run multiple scenarios, a common regulatory requirement or best practice recommendation.
- Reducing the risk that the insurance pool assets will not meet its objectives from an asset-liability point of view.
- Ability to support multi-scenario analysis which is a common regulatory requirement or best practice recommendations
- Let the machine do the tedious work of all the before and after regulatory calculations every time a rebalancing decision is made.
- Capability to nurse a portfolio back to health (from a capital adequacy viewpoint) within a few rebalancing cycles.
- Portfolio team members can access the platform anytime and from anywhere under the new normal.
- System ready to estimate from liability profiles or incorporate input parameters from actuary departments