Enterprise Risk Management Technology Guide :: Moody’s Analytics: Supporting insurers through Covid-19

Moody’s Analytics: Supporting insurers through Covid-19

Colin Holmes, managing director at Moody's Analytics, explains how the solutions provider is helping insurers steer through the Covid-19 pandemic and economic turmoil with a range of expertise

Colin Holmes2020 has been a demanding year - how is Moody's Analytics helping customers meet their challenges?

When we planned the year, we didn't count on Covid-19 disrupting things as it has. Like any responsible organisation, our priority has been to safeguard the health and wellbeing of all our colleagues, customers and industry partners. This meant we rapidly transitioned to working remotely. Serving customers effectively was our focus and our technology infrastructure has enabled all our staff to make that change essentially overnight.

As we adapted to remote working, the way we work together with customers has also changed dramatically. This is particularly true for large-scale projects such as IFRS 17/IFRS 9 where, in usual times, we would use a mix of in-person and remote interactions to collaborate.

The benefits of our 'vendor maintained' software approach have shone through this challenging period with implementation primarily focused on knowledge transfer and configuration of the methodology built into our software, rather than requiring large teams of on-site consultants to scope and perform customised builds.

We have sought to enhance what we offer our customers to help them deal with the pandemic and associated turbulence in various ways.

First, we have delivered insightful analysis and content to help our stakeholders, and we have made much of this content freely available online.

Second, in many areas, we have been able to integrate capabilities to deliver innovative solutions – many of which we have made available pro bono. For example, helping healthcare providers identify credible offers of personal protective equipment (PPE), by bringing together our data assets and software capabilities.

With our new SolvencyWatch™ solution, we have been able to help insurers track and manage their solvency position frequently and accurately, giving management teams greater insight and ultimately confidence.

In addition to helping insurers track their financial position, we are also helping them assess what the future might hold as the pandemic evolves by bringing together economic forecasting and scenario generation capabilities, with our AXIS™ actuarial modelling software actuarial modelling software.

History can always be helpful as a guide to the type of shocks we might see – but today's crisis may be unlike historical events. There is valuable insight therefore to be gained by considering forward-looking economic scenarios, based on today's environment.

Covid-19 aside, what are your focus areas?

As you would expect, new accounting standards – IFRS 9 and 17, CECL and LDTI in the US - continue to drive much of our work. Again, this is an area where we capitalise on the breadth of our capability.

The changing standards will significantly impact financial results, and the assumptions made to perform the calculations will have a strong bearing on results. As with the Covid-19 challenge I mentioned earlier - insurers need the capability to project and test financial outcomes. Our capabilities in economic forecasting are valuable in this, especially when combined with our expertise in actuarial and credit modelling, and enterprise software.

Has demand for solutions slowed? And have the challenges changed?

As the pandemic hit and standards were delayed, we naturally saw firms take a pause and consider their priorities – but the need to prepare for IFRS 17 or LDTI has not gone away. We continue to see a theme of insurers dealing with an increasingly complex set of challenges, which is driving demand for effective solutions, both to address specific standards and regulations, but more broadly to enhance risk measurement and insight.

This theme of effective solutions can also be seen in the continued evolution of our cloud-technology options, especially for intensive calculations such as stochastic modelling.

There is also the continued development of solutions for insurers' investment teams, where we are taking advantage of recent modelling enhancements that allow a sophisticated, integrated simulation of credit and market risks.

The current situation is challenging for us all, but we are proud to be doing great work with our customers and are excited about the future ahead.