Case Study: Alesco achieves optimal risk‑financing and insurance strategies with Palisade’s @RISK

Alesco Determines Optimum Risk Financing and Insurance Strategies with Palisade’s Risk Analysis Software

Alesco, an independent energy insurance broker and risk management consultant, needed to determine optimum risk‑financing and insurance strategies for large oil, gas and power clients facing volatile market and catastrophe exposures. To advise on how much risk to retain in operating units versus captives and when to transfer excess to reinsurance markets — while meeting regulatory requirements such as Solvency II — Alesco used Palisade’s @RISK to model future losses and compare alternative structures.

Using Palisade’s @RISK, Alesco ran Monte Carlo simulations in Excel to forecast long‑run average retained loss costs and volatility (e.g., the 95th percentile), test multi‑year and layered insurance/reinsurance options, and translate outcomes into three‑to‑five year impacts on premiums and capital requirements. The solution enabled rapid, auditable sensitivity analysis and clear graphics that helped Alesco recommend optimal programmes (for example, identifying a structure that maximised retained earnings at an acceptable standard deviation), reduce external premium spend where appropriate, and validate capitalisation under regulatory stress scenarios.

Alesco

Derek Thrumble

Partner