Quant 1

Quant 1 is a tool to evaluate risk events or scenarios that are not normally considered quantifiable. It taps expert knowledge within an organisation to estimate the likelihood of a risk event occurring at different impact levels.

Quant 1 uses a straightforward step-by-step process to gather data. The user defines the cost implications associated with different levels of severity for each risk event and approximates the frequency or likelihood of occurrence at each level.

Quant 1 displays the inputs in graphical form before running a series of simulations to develop distribution curves and to produce a comprehensive report of the outputs, consisting of:

• A report of quantification and simulation results for individual risks
• A report of quantification and simulation results for combined risks (convolution)
• An explanation of the relevant mathematical terms

These reports are generated by the Quant 1 software and the data exported into a Word template.

• The approach is sufficiently flexible to cater for a wide range of risk types while at the same time allowing an organisation to develop a more detailed relative understanding of its risks without the need for extensive background mathematical knowledge.
• Quant 1’s programming has been developed specifically for this application. It runs significantly more efficiently than most commercially available stochastic models, while providing the user with an easy-to use quantification interface, enabling real time modelling and more extensive, meaningful ‘what-if’ analysis to be carried out.
• The mathematical rigour behind the analysis is sufficient to enable subsequent, more detailed analysis to be performed at a later date.

Quant 1 is often used by clients of Zurich Strategic Risk as part of broader risk evaluation exercises. If the specific Quant 1 software is incompatible with existing systems, the same mathematical foundation can be adapted to fit a clients’ particular needs, with direct actuarial input if necessary.