The multiple and comprehensive ways Moody's Analytics supports insurers with their stress testing requirements, be it for IFRS 17 or climate change scenarios, earns it the title of stress scenarios software of the year.

Moody's Analytics help insurers with this process, using a combination of economic content, and stochastic and actuarial modelling software.

InsuranceERM's judging panel liked the fact Moody's Analytics combines its economics team's insights with stochastic real-world and climate pathway scenario generation capabilities.

Another plus for the judges is the scenario generation automation capability from Moody's Analytics that allows insurers to implement transparent, repeatable and auditable stress testing processes.

Climate risk is becoming another focal point for stress testing. The Bank of England's 2021 Climate Biennial Exploratory Scenario – which demanded insurers model the impact of climate scenarios on their balance sheets – is acknowledged to have accelerated the pace and depth of climate modelling and required firms to consider not just physical risk and transition risk, but also litigation risk.

Moody's Analytics offers a range of Climate Pathway Calibration services and a stress testing framework to support the use of climate change scenarios and related assumptions in real-world projections. These covers both deterministic and stochastic modelling options.

Finally, Moody's Analytics stood out in this category because it calibration tools enable clients to customise the path of market-risk variables and replicate desired stress levels. The flexibility and ease of use of these tools is a key feature that enables various stressed paths to be incorporated into the real-world stochastic projections over short, medium and long-term horizons.

The easy-to-use interface was also commended, and clients can set up and control their runbook through configuration rather than coding. This all allows the configuration of stresses to become a simple point-and-click exercise.