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Risk Management/Hedging

Outline

Due to the development of complex risk environment and measurement methodologies, the importance of risk management and hedging is increasing. Enterprise risk management (ERM) in business includes the methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives.

In 2014, regulators acknowledged derivative products under variable insurance or other insurance reserves which was for avoiding guaranteed reserving risk as derivative market products and allowed for trading. In 2015, evaluation of fair value guaranteed reserve under prime interest rate and projected assumptions had become available and the importance of hedging has arisen. By implementing hedging systems, insurers are able to remove or minimize the option risks and also will maintain consistency with IFRS17 requirements.

Scope of Business

R&A made a MOU contract with Numerix, the reputational company in US, on hedging and ESG (Economic Scenario Generator).
With R&A’s diverse consulting experience combined with Numerix’s rewarding cases, we are continuously creating great partnership. Also, by initiating presentations at Korean Academy of Actuarial Science on insurance policy in 2016, R&A is continuously engaged with research activities in order to maintain our leading position in the industry.

  • 01 ERM system expansion model implementation
  • 02 RBC, Solvency II, ICS (Insurance Capital Standards) system implementation
  • 03 ALM finance variability management
  • 04 Curve Fitting solution risk expense model implementation
  • 05 Greeks reporting system and Numerix hedging system implementation, guaranteed reserves and fair value valuation corresponding regulatory

    requirements
  • 06 Risk neutral and real world scenario (ESG)