InsuranceERM Annual Awards 2021 - Americas
Written by InsuranceERM.
The value of stress testing and scenarios became particularly apparent when insurers witnessed the impact of the Covid-19 pandemic on financial markets. With accounting standards such as LDTI and IFRS 17 coming down the line, not to mention climate stress tests for the insurance market, developing solutions to support insurers’ stress scenario requirements is become ever more crucial.
Moody’s Analytics is playing its part to support these trends. To help insurers during the pandemic, Moody's Analytics provided stress testing scenarios on a deterministic and stochastic basis, enabling insurers to understand the possible recovery scenarios and impacts across global markets.
Moody’s Analytics also offers a range of climate pathway calibration services and a stress testing framework to support the use of climate change scenarios and assumptions in real-world projections.
Colin Holmes, General Manager-Insurance at Moody's Analytics, explains that often its customers want to understand the sensitivity of their liabilities to different risk factors. The spokesperson says: “Moody’s Analytics works closely with customers to help them understand the subtleties of modelling and calibration choices and the impact on their liability projections.”
Even without the pandemic, there is a growing need for stakeholders to understand the drivers behind the changing risks in their business and to track and manage those risks frequently, says the spokesperson. In this regard, Moody’s Analytics offers real-world calibration tools to enable clients to customise the path of market risk variables in order to replicate the desired stress levels.
Features such as this prompted one of InsuranceERM’s judging panel to say that Moody’s Analytics stress scenarios solutions offer “solid incremental improvements involving the hot topics of the day”.
Other judges praised Moody’s Analytics “impressive set of client wins and testimonies” when it comes to stress scenario solutions.