Alesco Determines Risk Financing and Insurance Strategies with Palisade's @RISK
Alesco Risk Management Services Limited (Alesco), based in London, is an independent energy insurance broker and risk management consultant providing insurance and risk management solutions to the global energy industry. The company provides risk management, risk consultancy, and risk transfer services for clients encompassing upstream or downstream operators, drilling contractors, and traditional or alternative producers or power.
Many large oil and gas companies establish their own insurance subsidiaries, called captive insurance companies, to help manage the overall group risk which enables the company to retain higher risks than individual operating companies or business units.
Alesco works with these companies to determine how much risk they should retain in the business unit, how much should reside with their captives and at what point they should transfer the excess or catastrophe risk to local and international reinsurance markets. To help its clients develop an informed risk management strategy, Alesco uses @RISK to design models that forecast future insurance losses, allowing for alternative insurance structures to be tested with the goal of balancing an acceptable cost with their clients’ financial ability to retain risk.
"Palisade's @RISK makes it quick and simple to run Monte Carlo simulations directly in Excel, thereby avoiding the need to build complex models with thousands of rows of data and code," reports Derek Thrumble, Partner at Alesco. "As a result we can undertake complex forecasting for our clients within a realistic time-frame to influence decisions that meets their corporate, financial and legal requirements and determine the insurance strategy that is the best fit for them at that time."
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White Paper & Example Model: Financial Risk in Oil Fracking
In oil fracking, there are no exploration costs and no dry holes because wells are drilled in specific geological formations that cover wide areas of entire states. But knowing where to drill is still vital information as there are sub-areas within these formations where fracked oil well productivity is higher. The breakeven price for oil fracking is falling from lower capital costs, shorter completion times, higher output volume, and longer productive life. This reduces the inherent risk in oil fracking projects and enhances their prospects. In this paper and model, Roy Nersesian employs simulation and optimization using @RISK, Evolver, and RISKOptimizer to analyze real-life free market risks in the oil fracking industry.
For more on this topic, download the White Paper and accompanying Excel file or see Nersesian's in-depth treatment in the book Energy Risk Modeling.
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Risk Analysis Webinars Now Available On Demand
Watch informative webinars -- at your convenience -- to learn about risk and decision analysis modeling in Excel. We'll show how Monte Carlo simulation and other probabilistic analysis techniques can be applied to your everyday business analyses. See how easy it is in these brief presentations, featuring a variety of industries and applications.
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An Eyeball Model of an Internet Company
Excerpted from Financial Models 2 by Wayne Winston, Published by Palisade
Nobody really knows if the New Economy business models being floated today will ever make money. By tracking the number of customers a new business has, customer acquisition costs, revenue per customer, and profit margins, we can obtain some idea if a business model is viable. Using @RISK, we can generate thousands of scenarios to determine the viability of a business model. In this example, Wayne Winston walks through the steps to determine the chances Amazon.com will be profitable and whether their business model is viable.
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Introduction to Risk & Decision Analysis using @RISK & The DecisionTools Suite
08 December - 10am GMT / 11am CET / 9pm AEDT » Register Now
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16 November - 10am EST / 3pm GMT / 4pm CET » Register Now
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Palisade is the world's leading provider of risk and decision analysis software and solutions. Founded in 1984, its products @RISK and the DecisionTools Suite are used by over 95% of the Fortune 100, in nearly every industry around the world. Palisade is headquartered in New York State, and has offices in London, Sydney, Rio de Janeiro, and Tokyo.