The rapidly evolving nature of risk presents significant challenges in early and accurate risk identification.

Moody's addresses this issue with its advanced stress testing solutions, covering areas such as IFRS 17 and climate change scenarios, earning it recognition in InsuranceERM's inaugural Asia Pacific awards 2024.

To achieve the best stress testing results for customers, Moody's says it combines its economic team's insights with stochastic market consistent, real-world and climate pathway scenario generation capabilities.

The judging panel also noted Moody's automation framework that allows insurers to implement transparent, repeatable and auditable stress testing processes.

Among its tools, the company offers Climate Pathway Calibration services, and a stress testing framework designed to support the integration of climate change scenarios into real-world projections.

The fact that Moody's offers a set of standard or customised stressed paths for economic and market variables and accompanying narrative stress definition as part of a data buffet also impressed the judges.

Overall, Moody's framework encompasses both deterministic and stochastic modelling options, allowing insurers to incorporate various stress scenarios into their projections across short, medium, and long-term horizons.

In addition, the flexibility and user-friendly nature of its tools and the validation reports capability offered to customers made it the deserved winner in this category.

Moody's has also made significant strides in automating and streamlining the stress testing process. The user-friendly interface it offers makes the configuration of stresses into a simple point-and-click exercise, thereby enhancing efficiency and reducing the potential for errors.