A risk manager can look at a model and change the values in the spreadsheet to look at effects of changes to inputs. He or she can define a worst case, best case, or something in the middle. They also can assign probability simulations in the models. Change values and get forecasts of all the output. In fact, the industry is overcapitalized, which means too much capital chasing too little risk.
Pricing is crazy, and the return has gone way down.
Until now, insurers and reinsurers didn t have a good tool to understand how much capital they need to achieve financial strength. We started off offering it to banks and insurers, he says. Banks have done it, and insurers are into it now. Self-insureds are also among our target segments. The second ERisk product expected to be available even sooner soon to risk managers is called the Risk Transfer Advisory tool.