General description of systems
Towers Watson offers six products: Igloo, MoSes, Pretium, Replica, RiskAgility, RiskAgility P&C and Simulum. For details of Igloo, go to the entry for EMB - Igloo.
MoSes is a desktop actuarial and financial modelling solution for insurance companies writing life insurance, pensions and health insurance and can be used for all financial modelling purposes. These include valuation, embedded value, product pricing, profit testing, solvency reserve calculations, economic capital, statutory reporting, risk management, asset-liability modelling and corporate modelling.
Replica is used by insurers to derive replicating portfolios for their insurance liabilities which can then be used in a wide range of applications including economic and risk-based capital, performance measurement, risk dashboards, enhancing financial risk and management information, projecting the balance sheet and speeding up actuarial models.
RiskAgility is Towers Watson's enterprise financial modelling platform. RiskAgility is built on a Microsoft enterprise technology platform and has a common management environment that enables centralization and execution of both RiskAgility applications and other financial modelling applications such as MoSes.
RiskAgility P&C is a specialist desktop application for P&C insurers for undertaking dynamic financial analysis and risk modelling.
Simulum is a strategic capital model designed to enable busy actuarial and risk departments to construct a sophisticated model to represent the dynamics of their business very quickly and with no programming requirement. Simulum is an integrated model in the sense that all P&L items are modelled simultaneously, thereby removing the need to aggregate individual risk types. A desktop system based within Microsoft Office and the .NET framework, Simulum allows an effectively unlimited number of simulations to be performed speedily through use of multiple processor cores and the ability to spread the workload across machines in a network.
Functions performed
MoSes is a modelling engine for general purpose financial modelling and projection. It is used in a range of industries and markets including insurance, mutual funds, pensions, health, and banking. MoSes is used for many modelling purposes such as valuation, embedded value, product pricing, profit testing, solvency reserve calculations, economic capital, statutory reporting, risk management, asset-liability modelling, corporate modelling. It does not have an operational risk capability.
Replica's functions include: economic and risk-based capital modelling, risk reporting, ALM, compliance and statutory reporting, accounting and embedded-value reporting, performance measurement and attribution, and management information.
RiskAgility P&C can generate financial statements and cash-flow analysis and includes a wide range of functions such modelling insurance risk. It also provides an easy-to-use import functionality which allows third party catastrophe models from major vendors to be incorporated into the model. In conjunction with the flexible reinsurance model and rich reporting, companies can investigate their exposure to extreme insurance events.
Simulum is a strategic capital model. It provides an integrated framework to simultaneously model the following risks: underwriting, reserve, credit, market and liquidity. With its companion tool, the Risk Aggregator, Simulum also provides an effective platform to understand the impact of operational risk upon capital. Simulum may be used as a capital model in a regulatory sense or else as the risk measurement engine within a wide ERM framework.
Specific Solvency II features
MoSes is used by many clients as their main projection engine and can handle internal model development for the purposes of Solvency II. To supplement this we have an Economic Capital calculation, aggregation and allocation engine that, if required, operates in conjunction with MoSes. This Economic Capital engine operates on our RiskAgility platform which as well as handling economic capital calculations also provides improved risk management by virtue of its centralized, integrated, auditable, automated and managed technology It also provides a centralized database and analytics to ensure that information required for the use test is made available to the enterprise as a whole.
Replicating portfolios derived using Replica can help improve the frequency and accuracy of management information available, allowing companies to embed and utilize the risk information from their internal models within their risk-management system and decision- making process.
Towers Watson is committed to maintaining Simulum as a tool suitable for use as a full internal model, a component of a partial model and to support the preparation of the ORSA. The structure of the model has been designed with Solvency II in mind and as requirements become clear, then these will be integrated within Simulum.
Specifications
MoSes is a desktop modelling environment operating on a Windows platform. We have recently added the capability to run MoSes models on Microsoft's HPC technology to provide the robustness and power required for complex stochastic modelling.
Replica is a desktop-based system. It has been tested on a PC running Windows XP SP2 with Office XP SP3 (2002), but should work on any combination of Windows 2000/XP/Vista and Office 2000/2002/2003 with the latest service packs. While the minimum hardware requirements are a Pentium 4 processor with 1GB of RAM, optimal run times would be achieved using a Core 2 Duo processor with 2GB of RAM.
RiskAgility is our next generation risk/actuarial modelling platform designed for enterprise wide deployment. RiskAgility is built on Microsoft technology utilizing the .NET framework and other complementary pieces of the Microsoft product set.
RiskAgility P&C is a desktop solution that is also built utilizing the .NET framework and other complementary pieces of the Microsoft product set.
Simulum is a desktop solution that requires installation on individual machines. Simulum workspaces can, however, reside quite happily on networks. The installation of Simulum is a simple "one click" matter and typically takes approximately five minutes. No additional software is required other than Microsoft Office and the Microsoft .NET framework. Simulum makes use of the multiple-core technology appearing on most modern machines to materially increase the speed of simulation.
As a consequence, running Simulum on a dual-core PC results in the model running almost twice as fast. Additionally, Simulum allows individual runs to be split between multiple computers. Simulum is fully compatible with Microsoft Office and provides a sophisticated infrastructure to allow the user to analyze results, design custom reports or use the supplied reports within Excel, Access or a wide range of other solutions.
Licensing/sales/support
MoSes, RiskAgility and RiskAgility P&C are all available on a prescribed licence basis and a fee is levied to support the product and provide point releases. The software can be used by the relevant people within the organization once they have been trained.
A Replica licence agreement would be put in place covering the following: locations of use, details of any training to be included, amendments and modifications for a two-year period following the initial purchase and on-going support using helpdesk.
Simulum is provided as a licensed product in the sense that there is an initial fee to purchase the system and an annual fee thereafter. The annual fee entitles user organizations to request telephone/e-mail support and also to receive updates to the system as they become available.
While a consulting relationship is not compulsory, we generally find that client organizations get the best use from our systems if implementation assistance is provided to help them understand the best ways to integrate their systems, derive the appropriate assumptions and to interpret output. The aim of such an implementation exercise is that the client organization is able to undertake subsequent analyses with minimal input from Towers Watson. We can support clients on all aspects of actuarial modelling and associated work including Solvency II, mergers & acquisitions, economic capital and reinsurance.
Types of user
Typical users of Moses, RiskAgility and RiskAgility P&C are actuaries and financial modellers in life and P&C insurance, mutual funds, pensions, health and banking operations.
Replica users are generally life insurers who require stochastic simulations to value their liabilities. This typically includes with-profits companies and other products with embedded options and guarantees.
Simulum is a highly structured product delivered "ready-to-go" so that most clients can begin to calibrate the system to represent their own company immediately without adjustment to the system. Because of this, Simulum is mainly aimed at those organizations for whom it is not practical to run a large capital team dedicated to the maintenance of the model, but who require a robust and sophisticated platform upon which to model their business.
Areas/countries with the most users
Over 300 financial institutions use MoSes globally. We have large concentrations of clients in Europe, North America and Asia-Pacific, with a number of customers in other regions such as the Middle East, Africa and the Americas.
Replica is used by clients primarily within the UK.
Simulum has some 40 client organizations. These are primarily within the UK and Europe although we do have a small (but growing) user base in Asia Pacific and the US.
Contact persons and details
Igloo - see separate entry for EMB - Igloo
Moses, RiskAgility and RiskAgility P&C
David Tonner
Tel: +44 020 7170 2577
e-mail: david.tonner@towerswatson.com
Replica
Vanessa Leung
Tel: +44 1737 274128
e-mail: vanessa.leung@towerswatson.com
Simulum
Rob Collinson
Tel: +44 1737 27145
e-mail: robert.collinson@towerswatson.com
