Stochastic modelling lets your clients make informed choices

Stochastic models let you discuss projected future values, such as annual pension incomes from different withdrawal strategies, in terms of how likely each one is to happen.

They work by assigning probabilities to specific outcomes, based on real world analysis, which are then run through hundreds of simulations.

The result is a range of possible outcomes, each ranked in terms of how likely it is to happen.

Nothing is guaranteed, but a result based on real world analysis is far more trustworthy than one which assumes nothing will change over 40 or more years.

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How do we do it?

Building a trustworthy stochastic modelling engine is not a simple undertaking.

The scale of initial analysis and ongoing effort that is needed to keep one working and passing repeated due-diligence checks is significant. Fortunately, there are some problems that you don’t need to solve yourself, especially where an excellent solution already exists.

There aren’t many companies that provide stochastic modelling engines, and there aren’t any who can equal the depth of experience and range of expertise that Moody’s Analytics provides, which is why we've partnered with them.

Their underlying engine is widely recognized as an industry standard for valuing and projecting assets and liabilities, and assessing risk and capital positions.

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We've partnered with Moody's Analytics

Moody’s Analytics, a unit of Moody’s Corporation, helps capital markets and credit risk management professionals worldwide respond to an evolving marketplace with confidence.

The company offers unique tools and best practices for measuring and managing risk through expertise and experience in credit analysis, economic research and financial risk management.

Their stochastic modelling tool is integrated into enterprise risk management platforms, consumer advice tools, and valuation processes around the world.

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In the UK alone, 70% of insurers rely on Moody's Analytics models.

Key features of the integrated Moody's Analytics engine


  • Regularly passes due-diligence processes across a range of organisations.


  • Captures key retirement risk factors: asset returns, interest rates, inflation and mortality.
  • More granular asset classes across wider range of currency and economies than any other vendor.


  • Models across multiple markets, including real estate, alternatives, hedge, commodities, infrastructure, and emerging market debt.


  • Updated each quarter with current market prices and market conditions.


  • Comprehensive documentation of all models and quarterly economic assumptions.


  • Model a wide range of sophisticated product features: asset allocation glide-paths, constant proportion portfolio insurance (CPPI), guarantees, investment-linked and variable annuities.