overview

With the goal of keeping business lines like VA offerings consistently profitable for the overall bottom line, most major insurers implement hedging programs to protect capital and earnings against market fluctuations. Proper hedging relies strongly on a deep understanding of both assets and liabilities, and Numerix Hedge Performance Services are uniquely qualified to bring greater consistency and understanding to this process to ensure more effective hedges. 

Our team of experts begin by examining the institution’s liability portfolio and their corresponding hedging program—then perform in-depth analysis and back testing. Numerix financial engineers will analyze the overall profitability and look at the overall success rate of the hedging and examine how the hedges are actually matching (or not matching) the underlying positions, and advise accordingly. 

The difference starts with our models, because Numerix experts can leverage our unique ability to model both the asset and the liabilities based on the same core analytics and, therefore, reducing model risk in the assessment of the hedge adequateness.

capabilities

Full Service Approach

 

Hedge performance services include in-depth analysis of firm assets and liabilities, back testing, and examination of the overall success rate of the hedging program along with expert advice on improving matches and rectifying mismatches.

Experienced Practitioners

 

The Numerix Hedge Performance team consists of expert actuaries and financial engineers, bringing with them years of experience in the insurance industry and a wealth of advanced modeling techniques to tackle your unique product mix.

Reduced Model Risk

 

Because Numerix advanced models can be utilized across both asset and liability analytics, we are able to reduce model risk exposure in hedge analysis.

Benefits & Features
  • Consistency in Modeling Means Reduced Model Risk
    Our unique ability to model both the asset and the liabilities based on the same core analytics reduces model risk and facilitates more accuracy in the assessment of the hedge adequateness.

  • No Black Box – Gain Confidence through Transparency and Accuracy
    You will have complete transparency into each model used to analyze your hedging program and because our expert team leverages our Numerix Model Library, you will can have confidence that the advanced models employed have been rigorously tested and validated by our model validation team to ensure accuracy.

  • Experienced Team Ready To Work For You From Day One
    With years of experience inside some of the world’s largest insurers, our hedge performance experts are fluent in the challenges you face and ready to analyze your hedging program from day one—no need to spend time bringing a green or more general consultant up to speed on complex products, market models or methodology. 

Case studies
Ohio National Leading Hedge Case Study: Economic...
Transamerica Leading Hedge Case Study: Variable...
Additional Resources
Press Release
Numerix Leading Hedge Addresses Demand
Press Release
Numerix Leading Hedge Insurance Solution Enhanced
Product Collateral
Numerix Leading Hedge Suite Brochure: Advanced Analytics for ALM and ESG
Blog
Insurance Trend Talk: Variable Annuity Product Modelling and Hedging

Contact Sales