Conning’s FIRM (Financial Integrated Risk Management) system is a dynamic financial analysis (DFA) proprietary modeling tool used to stochastically model an insurance company’s assets and liabilities.
Developed in 1996, FIRM has been time-tested in the industry. Originally developed for property-casualty companies, it has been adapted for application to health and life-annuity companies and is used either stand-alone or in conjunction with industry software, such as asset liability management (ALM) software and catastrophe models.
FIRM is integral to our clients’ ERM processes and supports their regulatory and rating agency requirements. This system provides a series of sophisticated interconnected modules, with a building-block structure to allow maximum modeling flexibility. It provides a powerful, integrated platform for evaluating, analyzing and developing solutions for:
FIRM Modeling Process
FIRM modeling capabilities include:
- Economic and capital markets scenario generator—correlates economic and capital markets factors and simulates thousands of randomly generated scenarios.
- Asset simulation—analyzes the volatility of current and alternative investment strategies in response to economic and capital markets scenarios, correlated with liability impacts. Generates efficient frontiers for risk/reward evaluation in developing a strategic asset allocation (SAA).
- Liability simulation—evaluates the volatility of underwriting risks and the potential impacts of operating risks, on an integrated basis with asset risks, and across business lines.
- Financial statements and metrics—creates pro-forma financial statements on a U.S. Statutory, U.S. GAAP, IFRS, tax and economic basis to identify impacts on earnings and capital. Calculates rating agency and U.S. regulatory capital adequacy ratios.
- Report generator—creates standard and customized reports.
For more information about Conning’s proprietary modeling tools or strategic advisory services, please contact us.