We provide complete service in all aspects of economic capital modeling. These models are used for fundamental risk profiling, strategic decision making, enhanced transactional analytics, and ORSA process.
Introducing Economic Capital Modeling (ECM)
ECM should be considered nothing more than risk-aware financial planning. It augments existing planning process to enable a company to make decisions not only affecting performance along a most-likely projection, but also at various percentiles. It’s a framework for quantifying both upside and downside in financial projections, as well as exploring the drivers. We call this stochastic pro forma.
JLT Re is a partner in what we call complete risk profile management for our clients. Through the risk-aware financial plan, we excel at providing recommendations in our core area of expertise: reinsurance. But applications of the capital model also extend to exposure management, capital cost allocation, risk appetite and tolerance, investment decisions, and growth strategy.
What We Do
We support our clients in various capacities, including model design and development, validation of existing models, and applications to strategy, ORSA process, and ratings dialogue.
We differentiate ourselves through intellectual property derived from experience and robust consulting. We empower our clients to take ownership of critical assumptions and understand the sensitivity of results to the design. For example, through our STEM analysis, we offer both experience-based and exposure-based indications of volatility and correlation in underwriting results. Our ANSER project is so exciting because (when complete) we will offer the most capable, flexible and user-friendly software in the industry. ANSER will be used in our own work, but also available exclusively to clients through license.