Risk and modelling

Our approach is tailored to each client and market’s needs, based on our framework for quantifying and managing risk: the three Ms.  

Metrics

We use a mix of models to identify and assess risks and opportunities. From portfolio stress-testing and scenario analysis (backed by stochastic modelling), to cashflow analysis, longevity risk and everything in-between, our tools provide a comprehensive risk quantification.

Management

We create tailored frameworks that focus on meaningful measurement and explore the consequences of potential actions. What-if analysis, reverse stress testing and extreme event analysis combine with model-based decision support, like simulation and optimisation.

Monitoring

We implement frameworks to help us keep on top of risk and identify the right conditions to take action. We collaborate with colleagues across a range of disciplines to integrate our findings into our digital solutions.

Always flexible, we never compromise our principles.

Leading-edge research and development 

We constantly explore new approaches and techniques, partnering with leading universities, including University of Strathclyde, Heriot Watt and University of Edinburgh, to challenge and advance our thinking.

Made-to-measure and integrated

Innovative thinking counts for nothing unless it meets a client need. We adapt our foundational capabilities for each use then integrate them into our consulting frameworks.

Intuitive and accessible

Our models are complex and multi-dimensional, just like the real world. We put a lot of thought into our decision support frameworks to help us cut through the noise, clarify the right insight and guide potential actions, creating quick and confident decision-making. 

Quality and robust

We work hard to ensure the quality of our models. From initial research, real-world testing and enhancements to keep our models fit for purpose, the quality we create means clients can make decisions based on solid foundations. 

Ethical and transparent  

We use a ‘customer first’ approach, challenging ourselves to deliver the best outcome for humans. We consider ethics at every stage, from challenging potential bias in data sets to thinking through the ways different demographics could be excluded by an approach. 

One size doesn’t fit all. We use a carefully considered combination of tools and approaches on a case-by-case basis, developing bespoke solutions to deliver excellent client experiences.  

We offer: 

Economic scenario service 

For over 20 years, our economic scenario service (ESS) has helped quantify financial and market risks. ESS generates simulations of economic factors such as interest rates and inflation, along with a broad spectrum of asset class returns. This helps you evaluate the impact of today’s business decisions on tomorrow’s outcomes.  

Explore ESS

Strategic asset allocation 

We’ve developed a rigorous design process to deliver strategic asset allocations (SAA) across defined benefit, defined contribution and retail investment.   

Explore SAA

Risk hedging and transformation 

Our cashflow generation and analysis tools combine with ESS, demographic data (Club Vita) and market insights to help assess the benefits of risk transformation actions.  

We consider:  

• hedging individual risks
• liability-driven investment
• complete risk transfer of all financial and demographic risks to the insurance market.  

Extreme scenario modelling  

Sometimes there’s no precedent, or not enough data for traditional models. That’s why we developed our extreme scenario modelling framework. It helps us specify narratives for how extreme risks might emerge and develop, recalibrating ESS to reflect and investigate the consequences. This helps us explore the impact of risks like climate change and test various pathways to understand potential outcomes. 

Guidance and decision support 

The best mistakes are the ones you didn’t make in the first place. Combining our models with approaches to assess potential actions means we can test and understand ideas virtually, before doing anything in the real world. The good news is that we make the process as simple as possible – in fact, often our clients don’t realise they’re interacting with a complex model.