Predyct ERM Outsourcing

Many companies do not have the resources to build an enterprise risk model (ERM) that complies with the international solvency regimes and rating agency requirements for Internal Models. These companies are forced by regulators to default to the measurement parameters of an Industry Standard Model (ISM). The ISM’s parameters are established to facilitate a large number of companies in a very general way and are generally believed to impose a much higher capital standard on companies than would a more finely calibrated Internal Model. This will pose grave competitive issues for smaller companies.

Predyct Analytics will run a client’s data and provide:

• All of the risk measures for a company’s capital adequacy—see risk measures on Predyct ERM navigation bar
• Where a company’s capital is allocated on a risk attribution basis
• RAROC for each of a firm’s business activities
• Shadow rating as implied by the company’s risk

Predyct can perform this run without the need of the company providing any data to Predyct as long as we use the standard business configuration as disclosed in the company’s filings. Subsequent runs and refinements can be performed with company internal data to capture that company’s specific business configuration.

Predyct will also provide a complete analysis of results and train company personnel in the interpretation of results as well as how to present results to regulators and rating agencies. Predyct will update results and frequently as desired. This service can be provided at a fraction of what it would cost companies to build and staff their own ERM function.