Moody’s RMS’ Biyikoglu: Siloed systems and complex integration detrimental to modelling capabilities

Modelling risk is challenging enough on its own, but siloed systems and complex integration pose additional technical challenges for clients, according to Cihan Biyikoglu, executive vice president of product at Moody’s RMS.

Speaking with The Insurer TV during Moody’s RMS’ Exceedance Conference in New York last month, Biyikoglu said: “Modelling risk, all by itself, is a great challenge for our customers.

“But putting the full picture together from artefacts, models and data systems and applications to create an insight that is actually meaningful and can differentiate you from the rest of the pack, is fundamental.”

The challenge, however, is often with the infrastructure.

“The biggest thing that stands in the way of that is siloed systems and the complexities of integration that our customers have to constantly deal with,” he said.

“It's the difficulty of unifying all of these different systems, models, data and application into one cohesive unit. So, your teams are not constantly trying to run over sand. And they can really be a lot more efficient and focus on the core business that they're actually trying to resolve,” Biyikoglu added.

The “siloed system problem” is increasingly impairing a company’s ability to run a variety of different models at the same time, according to Biyikoglu, therefore hindering their ability to create “their own view of risk”. The answer to this is “unified modelling”.

“For our customers to create their own view of risk and to be able to get better coverage across a variety of different risks, unified modelling is designed to solve that part of the problem. This is when we can bring together multiple models, multiple vendors, multiple modelling teams to be able to give the customers an efficient way to operate all of these models to create a unique risk view that they can use to differentiate themselves from the pack,” he said.

Last month, Moody’s RMS announced that risk models from Applied Research Associates (ARA), Fathom and JBA Risk Management were all to be made available as a technology preview on the Intelligent Risk Platform (IRP), following the integration of the IRP into the Nasdaq Risk Modelling for Catastrophes (NRMC) service.

This announcement further builds on an earlier Moody’s RMS announcement on enhancing the IRP by integrating the NRMC service for Oasis Loss Modelling Framework-based risk models.

When the solution is fully developed, and subject to the necessary agreements being put in place between Moody’s RMS and its partners for the integration, customers who subscribe to the solution will be able to use IRP applications such as Risk Modeler, UnderwriteIQ and TreatyIQ for unified execution of Moody’s RMS models, as well as ARA, Fathom and JBA models, running on the Nasdaq modelling service, and other custom models and modelling engines.

Commenting on this initiative, Biyikoglu said that what Moody’s RMS has done is probably something that has been “very, very difficult for everybody else”.

He concluded: “I don't think there's anybody else who's actually done a capability like this before that can bring all of these different models together. The reason I think RMS does that, or I'd say, the reason RMS is in the forefront on this, is because we've been working on the siloed system, unified analytics problem for quite some time.

“I think most of our customers agree that that is one of the biggest challenges they face. So, in that respect, I believe we have a very unique offering that does not exist anywhere else.”