Standard Life Assurance Company of Canada (“Standard Life Canada”) has chosen to adopt Aon Benfield's PathWise platform, a variable annuity risk management business solution.
Developed by the Annuity Solutions Group (ASG) of Aon Benfield Securities in Toronto, PathWise is a Variable Annuity risk management business solution supporting new product development, financial and regulatory reporting, enterprise risk management activities, and hedge program management and reporting. The PathWise platform is an integrated high performance computing solution based on advanced parallel computing technologies, such as NVIDIA Tesla GPU (Graphics Processing Unit) hardware, and a purpose-built variable annuity and interactive grid computing middleware, to significantly accelerate simulation based risk management from weeks and days to minutes or seconds, delivering real-time performance levels and support for next-generation forecasting and decision-making. PathWise is the fastest and most highly integrated risk management business solution of its kind. ASG’s optional “software-as-a-service” model also allows clients to quickly adopt and deploy such advanced technologies on dedicated and secure infrastructure, managed by Aon Benfield, without the need to build and support new complicated infrastructure from scratch, often with considerable cost savings, and backed with service level agreements, covering reliability and targeted run times.
Standard Life Canada is a provider of long-term saving, investment and insurance solutions, and Aon Benfield Securities has fully customized PathWise to Standard Life Canada’s unique business needs and specifications in less than eight months and has allowed Standard Life Canada to implement a new hedging platform, including daily autonomous performance attribution reporting.
One important feature of the platform is PathWise SRT (Seriatim Real-Time Tool), featuring a real-time risk dashboard receiving live data feeds and analytics and displaying or plotting all of the real-time risk measures of a hedging program. The dashboard displays synchronized asset and seriatim policyholder liability values and risk measures together and recommended rebalancing trades and execution strategies. As well, the dashboard captures real-time derivatives trades from third-party asset administration and accounting systems. PathWise SRT also autonomously monitors risk limits, allowing clients to minimize any hedge program slippage.
Another important feature of the platform is PathWise Analytical Studio, a fully integrated IDE that interacts with all the liability models, scenario generators, inforce data and assumptions, unleashing the power of supercomputing to a desktop by using a simple and interactive scripting language. Analysts can easily run what-if analysis, stochastic-on-stochastic simulations plot and analyze results, versus manually wrestling with different systems and scores of input and output files. Another important feature of the platform is the PathWise Modeling Studio, which allows users to easily create their own liability cash flow models using a GUI and then deploy the models to a grid to harness the power of PathWise and GPUs.
The value of PathWise system especially stands out during times of increased financial markets volatility, where tools like PathWise SRT can help clients to more effectively manage market volatility and avoid the kind of hedge breakage losses of organizations which base trading decisions today on stale information from the liability computed overnight using approximations or short cuts.
Peter Phillips, Managing Director at Aon Benfield Securities said: “Standard Life Canada required a customized and comprehensive business solution that could be delivered quickly. They sought a cost effective solution and one that met their high risk management standards, the needs of their hedging program, their financial and regulatory reporting requirements, and new product development and pricing issues in one fell swoop. Standard Life Canada recognizes the importance of managing variable annuity risk properly and it has been our pleasure to partner with them to deliver on a best practices platform for this very important business activity.”
“The implementation of the PathWise system allows us to further improve our management of financial risks for the benefit of our clients. This is in keeping with our prudent approach to business. Having detailed and up-to-date financial risk information readily available is extremely valuable,” said Martin Ettles, Senior Actuary, Finance Risk Management at Standard Life Canada.
“Making fast and accurate decisions is critical to managing investment risk, particularly in this financial climate,” said Andy Keane, General Manager, Tesla business at NVIDIA. “Aon Benfield’s PathWise system fundamentally changes risk management by leveraging the latest parallel GPU computing technologies to deliver meaningful information to their customers immediately instead of hours or days later.”
