Management of balance sheet risk

Financial modelling removes the guesswork from managing the risks on your balance sheet. Because it measures the impact that alternative courses of action would have on your business, it becomes relatively easy to determine the most capital-efficient risk mitigation strategies.

In this way, modelling provides the platform to make well-informed decisions in the following areas, among others:

• Portfolio transfer

• Hedging options

• Use of Captives

• Diversification into new territories and classes of business

• Alternative Risk Transfer

• Reinsurance purchase

The analysis will not on its own tell you what strategy to adopt as this will depend on a number of other factors (e.g. appetite for risk, corporate objectives). It will, however, ensure that decisions are well-grounded.