Dynamic Financial Analysis (DFA) is the study of risks associated with operating a company — such as insurance, banking and manufacturing. Such risks can include:
- Interest rate fluctuations
- Inflation rates
- Frequency and severity of loss
- Catastrophic events
- Expense issues
- Price elasticity
If you want to build an Enterprise Risk Management (ERM) or a DFA model, but aren’t sure where to begin, Pinnacle offers its educational DFA model called DynaMo™ at no cost. Intended to be a starting point to learn more about dynamic risk modeling, DynaMo will help you decide if and how to build your own internal economic capital model. It also serves as the beginning of a rigorous modeling framework that fosters decision-making for strategic objectives.
DynaMo can help you address the following questions:
- What are the risks associated with your growth goals?
- Do different states, markets, products and competitive situations change your risk make-up?
- What is the optimal reinsurance structure for your company or group considering all lines of business?
- What are the risk/reward trade-offs associated with different reinsurance programs?
- What is the most efficient use of capital?
- How should capital be allocated between companies or lines of business of a group to measure performance?
- When should dividends be declared?
- How can you better communicate the risks associated with your business to external agencies?
Download DynaMo