DFA & Solvency Analysis

The insurance and reinsurance industy is increasingly adopting a more sophisticated approach to solvency, including Sovency II and similar initiatives. AHJ’s resources help our clients meet these challenges.

Dynamic financial analysis (DFA) is a risk management and modelling approach that utilises stochastic simulations to produce a wide variety of possible financial scenarios with associated probabilities. DFA is a principle method we use to evaluate optimum reinsurance strategies, counterparty credit risk and capital requirements.

AHJ have a flexible approach to DFA solvency modelling, combining the financial analysis tool ‘Risk Explorer’ with bespoke actuarial based models tailored to the individual requirements of specific cases.  We are thus able to evaluate our clients’ reinsurance programmes, analysing the risk (capital requirements) versus reward  (bottom line underwriting profit) of different risk transfer strategies.

We have a cooperation agreement with the consultancy firm James Brennan & Associates, giving us additional analytical and actuarial knowledge and resources.