Conning, a provider of investment management services, risk and capital management solutions and research to the insurance industry, released its ADVISE 5.7 Advanced Stochastic Modeling and GEMS 5.7 Economic Scenario Generator (ESG) Platform. The latest version is designed to offer enhancements that significantly improve insurers’ ability to understand and manage investment risk.
Conning's GEMS economic scenario generator is designed to enable users to simulate future states of the global economy and financial markets, and the ADVISE engine is designed to enable companies to optimize financial decision making across all interrelated aspects of their business.
The new release also builds out the platform’s capital management capabilities, and provides performance and ease-of-use enhancements, including the new advanced Efficient Frontier Analysis (EFA) Tool. EFA is designed to work in conjunction with the capital markets capabilities of the GEMS ESG to provide users with a sophisticated approach to finding their optimal investment allocation strategies, mapping the asset strategies along a risk-reward frontier.
According to Conning, additional new business logic features include:
- Enhanced Asset and Capital Rebalancing. The Decision Module can now be used in combination with the EFA tool to make decisions regarding investments and financing at the outset of the simulation. This new functionality aligns—and rebalances—the investment portfolio and capital structure before the simulation actually begins.
- User-Specified Credit Scenarios. The User Paths Module now enables for external credit scenarios reflecting pre-specified spreads and transitions as input for the Corporate Yield Model and the overall ADVISE simulation engine.
- Expanded Economic Variable Coverage. Version 5.7 calculates expected future points on the Treasury yield curve for use by the Life Insurance Module so they can be incorporated into point-in-time projected cash flows and discounted values.
- Poland Economy. The Poland Economy has been added to Conning’s quarterly real-world parameterization service.
“The new versions of GEMS and ADVISE respond to the insurance industry’s need to deliver superior returns in a challenging market environment while more efficiently balancing risk and reward opportunities,” said Stephen Sonlin, CFA, managing director and head of Conning’s Risk & Capital Management Solutions business. “Our goal is to help insurers meet those challenges and drive consistency in their overall performance with the development of sophisticated but user-friendly solutions such as the Efficient Frontier Analysis optimization tool.”
