Clients rely on Milliman experts to thoughtfully model possible future economic scenarios. Our extensive economic modeling experience, coupled with the latest software tools, enables Milliman consultants to carry out particularly sophisticated economic modeling assignments.

We are experienced in modeling in a real-world framework as well as in a risk-neutral framework. We are sensitive to and can apply specific capital market principles, such as the requirement for scenarios to be arbitrage free.

We have specific experience in projecting multiple simultaneous economic factors and considering appropriate correlations. Our clients benefit from our unusually deep knowledge of stochastic and multifactor simulations.

Our consultants are industry leaders in:

• economic simulation
• analyzing both stochastic and deterministic projections
• designing hedging strategies across the scenarios to minimize costs and tracking error and maximize effectiveness

Advanced technology simulates economic scenarios

Milliman's Scenario Generator was first developed in 1998 and has gone through several iterations through the years to advance its capabilities. It is a core element of MG-Hedge® and MG-ALFA® as well as our recently released Hedging Simulation Tool™. We have implemented models with stochastic volatility as well as models with stochastic interest rates.

Scenarios from Scenario Generator are, for example, used to populate Hedge Simulation Tool, which allows our consultants to model a variety of hedging approaches and weigh their merits before embarking on a hedging program.

Milliman's analytical experience and Scenario Generator tool offer clients a methodical way to analyze strategies for assets and liabilities to maximize benefit. Our complex simulations are based on realistic market dynamics and form the core of Milliman's advice to clients.

Leaving ad-hoc behind

For one client, Milliman used simulations to show how ad-hoc hedging decisions could introduce undesirable volatility and risks. A revised hedging program was designed by Milliman to fare better in possible future economic environments.