Consolidating Risk

To help insurers manage their risk exposure across the enterprise, Toronto-based Algorithmics has enhanced its Algo Risk solution to calculate risk for insurance liabilities and investment assets consistently within a single framework. Algo Risk is a grid-enabled Unix- or Linux-based system with a Web-enabled client reporting application built in Java, according to the vendor.

"The framework is extensible, which allows insurers to incorporate their preferred external liability simulators and to plug in their own proprietary models," explains Andrew Aziz, managing director for Algo Risk Solutions at Algorithmics. The product allows insurers to measure risk as it occurs, enabling competitive underwriting capabilities for accurate pricing, he asserts.

Algo Risk uses scenarios to link risk factors across all assets and liabilities to provide enterprisewide risk and portfolio analytics, according to Aziz. The solution, which can be implemented in-house or licensed on an ASP basis, also provides valuation models for variable annuities and their hedge positions to allow insurers to explore alternative hedging strategies and develop an enterprise asset and liability strategy, he adds. --M.W.