LocalTapiola, a large mutual insurance group in Finland, has signed a multi-year licence for Conning's Gems economic scenario generator (ESG).
The ESG will be used to calculate capital and the market value of liabilities, as well as to provide the real-world economic scenarios and asset modelling needed to support LocalTapiola's investment team in their strategic asset allocation (SAA) process.
Conning's Gems software simulates future states of the global economy and financial markets, using economic models and providing full market risk and asset class coverage.
"The real-world scenarios of the Gems ESG are used to understand the risk-return features of the different asset classes in order to optimise strategic asset allocation with market-consistent liabilities in our investment operations," said Samu Anttila, chief investment officer of LocalTapiola Life and responsible for the group-level ALM operations.
"With this software we can easily have several different outlooks on the long-term SAA decision-making process. We are long-term investors and we also have solvency capital that needs to be utilised efficiently."
Lauri Saraste, chief actuary at LocalTapiola Life, said, "We chose Conning because we required more advanced models that were consistent both for risk-neutral and real-world applications, were easy to recalibrate to match our in-house views and provide unrivalled fits to market data, which really is crucial for us."
Conning, headquartered in Hartford, Connecticut, is an investment management company serving the global insurance industry, with more than $94bn in assets under management as of 31 December 2014.