Taking risk management to the next level
SAMPENSION realized that in order to stay a market leader within risk management on the Danish pension market, they would need a long-term software solution to match and support their highly advanced in-house built risk management setup. To deal with this challenge, SAMPENSION decided to consider and analyze three opportunities simultaneously:
- to extend engagement with SimCorp
- to select a third-party system
- to extend in-house development
Having data stored in SimCorp Dimension already, it was natural for SAMPENSION to turn to SimCorp to discuss the first option. Meanwhile, the third option was rejected as SAMPENSION did not wish to build and maintain a department of a size sufficient to handle software development and maintenance. With regard to the second option, a number of third party systems were reviewed. However, as they would all require interfacing from the present SimCorp Dimension platform, and as SAMPENSION would be dependent on external data and/or methodology for further interpretation of results, this option was also rejected.
Further discussions with SimCorp led to an agreement to acquire the recently developed SimCorp Dimension Risk Management solution. This solution ensures the fulfilment of demands from SAMPENSION for both functionality and reduction of dependency on in-house development by moving the internal setup to an externally developed and maintained platform. Additionally, this integrated SimCorp Dimension risk solution enables SAMPENSION to reduce operational risk while ensuring full coverage of assets as well as transparency of risk measures.
The SimCorp Dimension Risk Management platform supports SAMPENSION’s continued coverage of a universe of approximately 60 risk factors (index, interest rates, spreads, FX, volatilities, etc.) and ability to perform both Parametric VaR and Monte Carlo simulations. The solution will also fulfil daily reporting requirements and demands for transparency in the system, at the most detailed level. At the same time, SAMPENSION will stay in charge of data used in their risk model as well as achieve a solution ensuring coverage of the wide variety of assets in their portfolios. Through integration on one single platform, data consistency across the system is ensured in terms of positions, market data, static data, and pricing, etc.
Headquarters: Copenhagen, Denmark
Industry: Pension Fund
AUM: USD 41 billion (end of 2014)
Sampension KP Livsforsikring a/s (Sampension) manages industry-wide pension schemes for primarily white collar employees in municipalities and central government, and private sector. The company is organised as a life insurance limited company, but essentially non-profit.
The company strategy is to deliver efficient management of labour market pension funds and investment portfolios at low administration costs. Sampension’s results prove the thorough success of this.