AonBenfield - ReMetrica

General description of system

ReMetrica is a risk modelling framework/dynamic financial analysis (DFA) tool for strategic decision-making. The software is a Monte Carlo simulation tool with an extremely easy-to-use graphical interface enabling users to quickly build models and run analyses for a variety of financial decisions. No programming is required to build sophisticated models using the software. The software provides the following advantages:

• Flexibility - a risk platform that can be used for simple pricing models to full-scale internal capital models
• Robustness - includes a comprehensive set of pre-built and validated logic for modelling re/insurance business and assets
• Transparency - over 800 pages of clear, concise documentation detailing the included logic
• Auditability - licensed to many of the world's top actuarial consultants giving a range of choices for independent model review
• Productivity - build models quickly and efficiently using the included templates and pre-built logic without the need to learn complex programming languages.

Launched in 1999, the latest release of ReMetrica is version 5.0 which has been designed with Solvency II in mind, and is of interest to any firm facing the challenge of responding to Solvency II or equivalent regulatory changes.

Functions performed

ReMetrica is used for a wide variety of purposes, especially the following:

• Enterprise risk management/economic capital modelling
  • Risk quantification and correlations, risk appetite
  • Capital adequacy & allocation
  • Measuring returns on capital & the cost of capital
  • Measuring/testing risk treatment strategies
• Business planning/forecasting
  • Product pricing & planning (e.g. entering a new line or territory)
  • Strategic business mix - portfolio effects, diversification benefits
  • Scenario testing
• Corporate structure analysis, mergers & acquisitions etc.
• Portfolio aggregation
• Asset & liability management
• Reinsurance strategy & capital market transactions
  • Optimizing structure, technical pricing, internal cost allocation
  • Cat bonds, ILWs, sidecars, swaps, basis risk analysis, contingent capital etc.
• Operational risk

Specific Solvency II features

The latest release incorporates many new features that will help firms comply with the new regulations and satisfy the regulator. Version 5.0 allows users to build one model for both internal business decisions and for regulatory reporting, thus providing value to the business through better decisions and satisfying the regulatory "use test" criterion. In particular version 5.0 provides a number of components for Solvency II specific modelling approaches:

• 1 year vs ultimate - Whereas most firms will model their risk on an ultimate basis, Solvency II is built around the 1-year view. ReMetrica 5.0 squares the circle, allowing you to use your existing ultimate models but apply a recognition pattern to generate the 1-year, balance sheet to balance sheet view.
• Unearned and unincepted business - Solvency II requires all such obligations to be brought on to the balance sheet, and ReMetrica version 5.0 generates the additional provisions accordingly and adjusts reserves accordingly.
• Solvency II fair value reporting - A financial reporter aimed towards the "fair value accounting" of Solvency II, including fully discounted balance sheets, premium provisions and market value margins. One model can provide both GAAP and fair value reports simultaneously.

In addition, ReMetrica is the only platform on the market to be licensed by most of the world's top actuarial consultants, providing insurers with a choice of independent and knowledgeable auditors of their internal capital models. This independent audit & validation is vital for gaining regulatory approval.

Specifications

ReMetrica may be installed on a desktop or server. Installation requires some flavour of Windows and Office, and a relational database -- typically SQL server -- may be used in addition. ReMetrica is one of the fastest systems on the market on a single processor, and users may run the simulations in parallel across a network for increased performance.

ReMetrica is fully programmable with Visual Basic for Applications (VBA) by Microsoft, and may be embedded within user applications using Com or .NET.

Licensing/sales/support

Companies may license the software on a standalone basis or together with consulting. There is an annual licence fee which includes training, email/telephone hotline support, support website and upgrades which occur at least once every year. There are also annual user conferences in the US, Europe and Japan.

Types of user

• Non-life and composite Insurers
• Reinsurers
• Consultants

Areas/countries with the most users

ReMetrica is a market-leading tool used widely throughout the non-life insurance industry. The user base is worldwide including UK, Europe, Bermuda, US, Japan, Asia, South Africa, Israel and Middle East.

Contact person and details

Paul Maitland
Aon Benfield
55 Bishopsgate
London EC2N 3BD
UK
Email: paul.maitland@aonbenfield.com
Tel: +44 207 522 3932

Ross Franklin
Aon Benfield
55 Bishopsgate
London EC2N 3BD
UK
Tel: +44 20 7522 8254
Email: ross.franklin@aonbenfield.com

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