STAR ESG - Willis Towers Watson

Type of System

  • Analytics
  • Asset/liability management
  • Economic scenario generator
  • Internal/external reporting
  • Portfolio analysis/hedging
  • Risk Management
  • Stress testing

Type of Platform

  • Desktop-based
  • Server-based
  • Grid

Most recent significant updates:

In August 2018, we released version 3.2 of our risk neutral model STAR RN. This includes features designed to increase automation, speed and quality of the scenario generation process, as well as number of changes to enhance usability. The key enhancements include:

  • Allows the calibration of a combination of at-the-money (ATM) swaptions and out-of-the-money (OTM) swaptions.
  • New inflation model with improved model fit and martingale test results.
  • Enhanced correlation structure between asset classes.
  • New functionality to enhance software usability and quality of scenario generation.
  • Added change log so validation criteria can be easily checked.

We've also introduced a series of enhancements to our real world model STAR RW, improved the speed of calibration and provided greater flexibility to target different investment views.

Planned future enhancements:

Over 2018 - 2019 we are planning a series of enhancements to our real world model STAR RW. These enhancements will improve the calibration process efficiency and speed. We are working on enhancements to the credit modelling for both Real Word and Risk Neutral ESGs.

Other Features

The offering facilitates

  • Curve-fitting
  • Least-squares Monte Carlo
  • Solvency II standard formula
  • Solvency II internal model
  • Replicating portfolios
  • IFRS 17
  • Principle-based reserving

Integration with third-party or in-house systems?

STAR ESG integrates seamlessly with many of Willis Towers Watson's other software products: with Igloo for financial modelling, with RiskAgility Proxy Modeller to produce nested stochastic scenarios as part of a Least-Squares Monte Carlo modelling solution, and with Willis Towers Watson's automated workflow solution, Unify. STAR ESG models are also used in a large number of third-party systems. Outputs can be generated in any data structure in the formats .CSV or .TXT. Alternatively, results can be written directly to a database for sharing with other third-party systems.

Implementation and Costs

Typical implementation costs:

In most cases there is no implementation cost, as this is largely done by clients on-site. Most users get the models installed within hours. The models are self-contained with intuitive interfaces so users can start using the software immediately.

Key attributes of product:

STAR ESG is a comprehensive solution for capital setting, risk management, hedge design, ALM, asset allocation and market consistent valuation requirements. Its scope is global, with standard calibrations for 26 economies and the capability to generate returns for a very wide range of asset classes.

Technically robust models are combined with Willis Towers Watson's in-house investment views, fusing together quantitative technology with qualitative expertise to generate a realistic distribution of outcomes. Calibration tools give unparalleled control to determine the path of projected outputs, an essential pre-requisite for using the model to take business decisions.