Benfield, the world's leading independent reinsurance and risk intermediary, today announced the launch of a new financial modelling tool that assists re/insurers to better quantify the risks inherent in their business in line with rating agency and solvency requirements.
Developed by the Benfield ReMetrics team – who specialise in the development and licensing of risk analysis software – CRAFT (Curve for Risk Analysis Fitting Tool) enables users to fit loss severity distributions to loss experience data, thus creating a more accurate impression of a company’s financial risk profile.
Modelling to a high level of detail is particularly important in the current financial environment given the challenges that are being faced by the industry, such as decreasing reinsurance rates and lower investment income.
“The software is based on internal tools which have been used by Benfield’s actuaries for some years and overcomes many of the drawbacks of the existing packages on the market,” said Paul Maitland, Team Leader of Benfield’s ReMetrics Risk Software division.
CRAFT has many advanced features that differentiate it from other financial modelling tools. It allows for a mixture of data and constraints, such as historical losses and a certain Probable Maximum Loss (PML) amount, so that the distribution can fit against all information. Meanwhile, it enables fitting against subsets of the data, excluding any certain outliers.
CRAFT covers all the most commonly used distributions, and lets users define the technique they want to use for the fitting, including Maximum Likelihood Estimate and Sum of Squares fitting methods. The software also provides Kolmogorov-Smirnov goodness of fit statistics.
Many products offer views of risk that are bounded by definitive maximum and minimum limits. CRAFT enables users to include this information within the fitting process.
CRAFT may be used on a stand-alone basis, as an add-in to Excel spreadsheets, or as an add-in to ReMetricaTM – Benfield’s award-winning DFA and capital modelling software.
For further information, please contact:
Andrew Wragg/David Bogg Benfield (UK) T: + 44 (0)20 7522 8183 E: Andrew Wragg
Peter Rigby Haggie Financial (UK) T: +44 (0)20 7417 8989 E: Peter Rigby
Ansi Vallens Signals & Strategies (New York) T: + 1 518 392 4238 E: Ansi Vallens
Notes to Editors:
About Benfield Benfield is the world’s leading independent reinsurance and risk intermediary. Its customers include many of the world’s major insurance and reinsurance companies as well as government entities and global corporations. Benfield operates from more than 50 locations worldwide. The company is listed on the London Stock Exchange under the ticker symbol BFD. www.benfieldgroup.com
