[February 07, 2011] : Algorithmics Awarded Patent For Operational Risk Capital Modeling Framework; Algo OpVaR capital modeling allows clients to effectively measure and manage operational risk Tweet (M2 PressWIRE Via Acquire Media NewsEdge) RDATE:07022011 Toronto, London -- Algorithmics, the leading provider of risk solutions, today announced that it has been awarded a patent for its operational risk capital modeling framework. The patent recognizes Algorithmics investment in its operational risk solutions at a time when operational risk management is receiving considerable regulatory attention. The patented capital modeling framework will be offered as an extension to Algorithmics Algo OpVar operational risk management software. It represents a framework and technology for calibrating, simulating and measuring operational risk and provides robust data analysis combined with sophisticated tools for modeling loss events. The framework provides a method for aggregating loss estimates, using a combination of the actuarial technique of estimating frequency and severity separately, and combining these using Monte-Carlo simulation to produce an overall estimate. By performing these calculations for the individual business lines and risk types, and then combining these estimates, clients can arrive at a bottom-up estimate for their overall operational risk exposure. Ben De Prisco, Senior Vice President of Research and Financial Engineering at Algorithmics, said: This technology represents a significant advance in the area of operational risk modelling and measurement which is particularly timely, given the increasing regulatory recognition of the importance of operational risk. Capital remains one of the most powerful tools in the regulators armoury to control financial institutions. Basel III is adding yet more stringent capital requirements on the banks, and Solvency II is doing the same for insurance companies. The capital modelling framework provides these institutions with the ability to analyze their loss data in a meaningful and structured way. The patented techniques, implemented in the Algo OpVar capital modelling extension, use internal and external loss data, taken from Algorithmics loss databases (Algo FIRST and Algo OpData), to give management a good estimate of the capital required to cover these types of risk and can help them decide where to invest in additional controls or where to make changes to the business to minimise their exposure. The end result is a comprehensive and transparent approach to measuring and managing operational risk. Michael Zerbs, President and COO, Algorithmics, added: This latest patent is yet another example of our commitment to research and innovation in risk management technology and further extends our patent portfolio. We will continue to invest in cutting-edge research to ensure we provide risk solutions that help our clients create value. For more information about Algorithmics' solutions, visit: http://www.algorithmics.com For further information please contact: Heather Smith, Senior Communications Manager, Algorithmics (UK) Ltd Direct line +44 (0) 20 7392 5820 Mobile +44 (0) 7515 974223 E-mail: [email protected] Notes to Editors: Algorithmics is the world's leading provider of risk solutions. Financial organizations from around the world use Algorithmics' software, analytics and advisory services to help them make risk-aware business decisions, maximize shareholder value, and meet regulatory requirements. Supported by a global team of risk experts based in all major financial centers, Algorithmics offers proven, award-winning solutions for market, credit and operational risk, as well as collateral and capital management. Algorithmics is a member of the Fitch Group. www.algorithmics.com Algo OpVar Capital Modeling is the capital modeling extension in Algo OpVar Standard Edition dedicated to simulating and aggregating loss calculations, developing best-fit frequency and severity estimates from historically observed loss data and incorporating risk and control scenario analyses. Algo OpVar Standard Edition is the industrys only fully integrated out-of-the-box solution for the identification, collection, and management of operational risk. Developed with a best-practices methodology for operational risk management, Algo OpVar Standard Edition enables an institution to quickly implement a fully-functional, comprehensive operational risk management framework. A flexible and comprehensive software product, Algo OpVar Standard Edition is designed to meet organizational needs and business requirements, while reducing total cost of ownership. Algo FIRST, utilizing a unique real-life case study approach, is designed to assist institutions with their analysis of risk, governance and compliance events. The Algo FIRST database is used as a qualitative tool, providing information on control breakdowns, event triggers, insight into why the losses occurred and lessons learned. Algo FIRST contains case studies on more than 9,600 loss events and is unrivalled in its depth of analysis and coverage of the industry. Algo OpData Nearly 12,000 publicly-reported operational risk losses populate the Algo OpData quantitative loss database, making it the most complete operational loss resource available today. Algo OpData is a key component of the capital modeling process, supplementing internal loss data in order to populate 'tail' (high severity, low frequency) events so that firms may gain insights into risks they have yet to experience. Fitch Group is the parent company of Fitch Ratings, a global ratings agency committed to providing the world's markets with independent, timely and prospective credit opinions. With 49 offices worldwide, Fitch Ratings global expertise spans across capital markets in over 150 countries. Fitch Ratings is headquartered in New York and London. The Fitch Group also includes Fitch Solutions, a distribution channel for Fitch Ratings products and a provider of data, analytics and related services; and Algorithmics, the world's leading provider of enterprise risk solutions. The Fitch Group is a majority-owned subsidiary of Fimalac, S.A., headquartered in Paris, France. For additional information, please visit www.fitchratings.com www.algorithmics.com and www.fimalac.com 2011 Algorithmics Software LLC. All rights reserved. ALGORITHMICS, Ai Logo, ALGORITHMICS & Ai Logo, ALGO, MARK-TO-FUTURE, RISKWATCH, KNOW YOUR RISK, ALGO RISK, ALGO MARKET, ALGO CREDIT, ALGO COLLATERAL, ALGO FIRST, ALGO ONE, ALGO FOUNDATION, ALGO FINANCIAL MODELER, ALGO OPVAR and TH!NK Logo are trademarks of Algorithmics Trademarks LLC. ((M2 Communications disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to [email protected])). (c) 2011 M2 COMMUNICATIONS [ Back To TMCnet.com's Homepage ]