Ortec Finance - Economic Scenario Generator
Type of System
- Economic / risk scenario generator
- Portfolio analysis/hedging
- Risk management
- Stress testing
Type of platform
Other features - the offering facilitates:
- Least-squares Monte Carlo
- Solvency II internal model
What are the typical implementation costs?
The Ortec Finance Economic Scenario Generator is based on a subscription or licence model. Implementation costs are relatively low. Costs vary, mostly depending on the client’s IT structure and connectivity situation.
How long does your software take to implement on site?
Implementation duration is relatively short. Although to a certain extent plug-and-play, implementations are bespoke. Timelines are dependent upon the client’s IT structure and connectivity situation.
Please name companies that use the system/solution
ING- a global bank with a strong European base.
Philips Pension Fund - the administrator of the pension plans for current and former employees of its two associated companies in the Netherlands.
OMERS - one of Canada's largest defined benefit pension plans.
NTUC Income - the leading composite insurer in Singapore offering life, health and general insurance.
eLo - a large Finnish pension insurance company.
Most recent significant update:
Added ESG Leaders and Climate Paris Aligned Equity Benchmarks
Economy Customization Layer for ease of use and push-of-a-button scenario calibration
Credit Rating Transition Scenario Model for buy & hold corporate bond portfolios
Update of long-term Capital Market Assumptions based on latest academic research and insights
Planned future enhancements:
Extending the functionality of the API
How does your solution integrate with third-party systems or in-house systems?
The Ortec Finance ESG integrates with third-party systems and in-house systems by supporting a wide range of flexible output formats and / or the API.
What is the key attribute of your product(s) that differentiates it from your competitors?
The Ortec Finance ESG takes what is traditionally a complex and inconsistent mix of models and replaces this with one model that integrates short and long investment horizons consistently across all asset classes and economies. A wide range of investment and risk management applications (ALM, SAA, ORSA, etc.) can now be served with one model.
By using one integrated and consistent methodology, it provides the most realistic balance sheet-level risk and return scenarios for all relevant time horizons and applications simultaneously. This approach thereby brings consistency and efficiency to the investment decision-making and Enterprise Risk Management framework.
A proprietary frequency domain methodology, combined with dynamic factor models, is purposefully build to capture the complex realities of financial and economic markets for all horizons and asset classes at any point in time. This is evidenced by solid back-test results, indicating a 10% outperformance over competing approaches.
What trends are you seeing in terms of customer demand?
Climate change: There is a rapidly increasing demand of financial institutions for integrating the impact of climate change, and broader Environmental Social Governance criteria, into investment decision-making and risk management processes. Based on a powerful collaboration between the climate and scenario experts of Ortec Finance and Cambridge Econometrics, the Ortec Finance scenarios can incorporate systemic climate risks and opportunities associated with different global warming pathways.
Private assets: There is a clear and ongoing trend of investors seeking to analyse and increase their holdings in private assets. Private assets can offer increased return through their illiquidity premium and lower risk through diversification. Compared to traditional assets, the modelling of private assets is less data-driven and more challenging. Ortec Finance supports four types of approaches for modelling private assets: a total return approach, a cash flow approach, a hybrid approach and proprietary modelling approaches.
Client servicing: Institutions are demanding higher quality of service from their providers. Client surveys show that 93% of the clients is satisfied with Ortec Finance. With more than 35 years of experience in building, applying and innovating scenario models, the Ortec Finance team of dedicated scenario software and modeling professionals is in a unique position to upgrade your scenario models as well.
Benefit from efficient, consistent, realistic and independent scenarios, powered by the frequency domain approach of the Ortec Finance Economic Scenario Generator.