The world's leading risk and actuarial research departments have come together under the Willis Research Network (WRN), the academic and analysis arm of Willis Group Holdings, the global insurance broker, to support the industry’s development and use of economic capital models required under Solvency II and similar regulatory and rating regimes worldwide.
Economic Capital Modelling (ECM) forms the basis of risk and capital decisions in reinsurance companies. Despite this growing significance, economic capital modelling is still in its infancy, with market institutions struggling with many fundamental challenges, tactical uncertainties, and day–to–day choices. There is a demand for a shared bed rock of understanding, peer reviewed methodologies, tools, and best practice to enable organisations to move forward more confidently.
In response, Willis has founded the Willis Research Network Economic Capital Forum at Georgia State University (WRN–ECF) with partners at Risklab, ETH Zurich and the Risk Management Institute, National University of Singapore to provide a facility for open science, industry and public policy collaboration in this key area.
The research and outputs from the Forum will be integrated with Willis’ own operations and driven through Research Programme Areas, which focus on methodological research, thought leadership and problem solving. Collaborative Research Projects will provide implementable modelling tools and applications by Willis and the wider industry.
Said Rowan Douglas, CEO Global Analytics at Willis Group and Chairman, Willis Research Network: "Our partnership with Georgia State is a significant development for our industry. Economic capital models are the spine of insurance company operations and risk management, but we need greater understanding and a new culture to employ them wisely. The Forum provides that environment.”
Professor Richard Phillips, Chair of the Risk Management and Insurance Department at Georgia State University, added: “At GSU and across academia we have been waiting some years to do this and it was about finding the right industry partner. The Willis Research Network provides a unique platform between science and finance producing a powerful new supply chain of expertise and capabilities into the industry and wider society. Willis is a re/insurance broker but they are now an intellectual broker too.”
The Forum, which is co–funded by GSU and Willis for at least five years of operation across the Americas, Europe and Asia Pacific, will be overseen by a Management Board co-chaired by Professor Phillips of GSU and Mr Douglas of Willis and an external Advisory Board from industry, regulators and academia chaired by Professor Paul Embrechts of Risklab ETH.
The Forum's founder Director is expected to be appointed from November 2011 and a global search is currently underway. Details may be found via www.rmi.gsu.edu/
The Willis Research Network is the world's largest collaboration between public science and the finance and insurance sectors. Some 50 universities and public science institutions across the globe collaborate with Willis and the wider industry to confront the challenges of managing risk and delivering resilience within environmental systems, financial markets and public policy.
Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at www.willis.com.