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IBM M2020-622 Exam - IBM Risk Analytics for Insurance and Pensions Sales Mastery Test v1

Questions & Answers for IBM M2020-622

Showing 1-15 of 24 Questions

Question #1

What is the appropriate solution for an insurance company, managing its own assets,
seeking an asset focused market risk solution?

A. IBM Algorithmics Portfolio Construction and Risk Management for Fund Managers

B. IBMSolvency II Accelerator

C. IBM Algorithmics Actuarial & Financial Modeler

D. IBM Algorithmics Economic Capital and Solvency II: Enterprise Edition

Explanation: Algorithmics Portfolio Construction and Risk Management for Fund
Managers solution offers an advanced risk framework to optimize portfolio performance
and risk oversight while addressing client and regulatory demands for better reporting in a
timely fashion. The solution is designed in three editions Reporting, Managed and
Installed to support therequirements of Fund Managers for both absolute and relative
risk, irrespective of their size, level of sophistication or objectives.

Question #2

What is the appropriate solution for an insurance company seeking to reduce or eliminate
operational risk in its actuarial modeling?

A. IBM Algorithmics Economic Capital and Solvency II: Enterprise Edition

B. IBMOpenPages Operational Risk Management Solution

C. IBM Solvency II Accelerator

D. IBM Algorithmics Actuarial & Financial Modeler

Explanation: Algorithmics Actuarial and Financial Modeling offers insurance firms a
comprehensive actuarial modeling solution thatprovides essential risk and value
information to help meet the needs of a global client base.
This solution supports the modeling of insurance portfolios across a spectrum of risk-based
regulatory regimes such as Solvency II. It helps meet the businessneeds of insurers for
more realistic and complex modeling to enable critical risk-informed decision support for
growth.
Algorithmics Actuarial and Financial Modeling is an advanced actuarial modeling solution
that includes the following IBM products as integral components:
* Algo Financial Modeler is an actuarial modeling system that helps insurers around the
world meet regulatory compliance challenges such as Solvency II. It provides insurance
companies with a holistic risk and value overview of the enterprise, enabling more effective,
risk-informed decision making.
* Algo Financial Modeler Enterprise is an advanced web-based production system that
allows AFM models to be managed and run in a separate and secure control environment.
* Algo Audit and Compliance is a data, assumptions and reporting system that integrates
with AFME to provide complete workflow, transparency and control around the end-to-end
actuarial modeling process.

Question #3

For which type of company would the Compliance & Reporting Edition of the IBM
Algorithmics Economic Capital & Solvency II Solution be most suitable?

A. A North American-based insurer seeking NAIC and SMI compliance

B. A large global insurer interested in using Internal Models to compute Economic Capital

C. A firm interested in upgrading to a new actuarial modeling system

D. A multi-line insurance company interested in a complete package that supports the Standard Formula

Explanation: Compliance and Reporting Edition
* Offers a pre-configured, robust and rapid implementation solution for Solvency II that
focuseson a Standard Formula approach. Provides you with the capabilities of Algo
Financial Modeler, a powerful actuarial and financial modeling engine, combined with a
workflow, governance and reporting tool to deliver an end-to-end solution for Solvency II
* Algo Financial Modeler can either calculate liability cashflows or act as an aggregation
layer to consolidate cashflows generated by existing actuarial systems.
* Offers the flexibility to scale up to the more advanced feature set of the Enterprise
Editionto meet the challenges of changing business requirements and growth.

Question #4

For which one of the following is the Solvency II Accelerator the appropriate solution?

A. An insurer interested in a managed hosted solution.

B. Aninsurer looking for Pillar I analytics support.

C. A large insurer needing support for ORSA

D. An insurer interested in a reporting solution which will integrate with other sources of data.

Explanation: IBM Solvency II Accelerator
* Cognos BI, as the front-end reporting tool, allows for the viewing,
sharing, analysing and reporting of data with the added features of
data lineage, version control and documentation. The output
management features allow for the automation, scheduling and
generation of all the necessary reports by quarter, by business entity,
by country and by currency.
Cognos FSR, as the XBRL engine, allows for the automated creation
of FSA output together with RSR & SFCR reports.
* The IBM Integrated Solution with data stored in single repository and feed to Cognos FSR
and Cognos BI

Question #5

How does Algorithmics address the different requirements for each size of institution that
exists within the overall insurance and pensions markets?

A. Tailored solutions

B. Partner solutions

C. New acquisitions

D. Better presentation of single solutions

Question #6

Which of these C-level executives would be a key influencer for the selection of a Solvency
II Compliance Solution?

A. Senior Vice President of Global Sales

B. Chief Marketing Officer

C. Vice President of European Sales

D. Chief Investment Officer

Explanation:
* Solvency II is an EU legislative programme to be implemented in all 27 Member States,
including the UK. It introduces a new, harmonised EU-wide insurance regulatory regime.
The legislation replaces 13 existing EU insurance directives.
* The Solvency II Directive 2009/138/EC is an EU Directive that codifies and harmonises
the EU insurance regulation. Primarily this concerns the amount of capital that EU
insurance companies must hold to reduce the risk of insolvency.

Question #7

Which risk management technique is currently the main motivation for pension funds to
acquire new risk management systems?

A. Operational Risk

B. Liability hedging strategy

C. Corporate counter party risk

D. Sovereign debt risk

Explanation: Pension funds currently face a multitude of challenges and risks. We believe
liability hedging (also known as liability matching) is an effective way to help de-risk a fund.

Question #8

What is the product at the core of the IBM Algorithmics Economic Capital and Solvency II:
Compliance and Reporting Edition?

A. Netteza

B. IBM Algorithmics Actuarial & Financial Modeler

C. Collateral Management

D. Open Pages for Insurance Risk

Explanation: Compliance and Reporting Edition
*Offers a pre-configured, robust and rapid implementation solution for Solvency II that
focuses on a Standard Formula approach. Provides you with the capabilities of Algo
Financial Modeler, a powerful actuarial and financial modeling engine, combined with a
workflow, governance and reporting tool to deliver an end-to-end solution for Solvency II
*Algo Financial Modeler can either calculate liability cashflows or act as an aggregation
layer to consolidate cashflows generated by existing actuarial systems.
* Offers the flexibility to scale up to the more advanced feature set of the EnterpriseEdition
to meet the challenges of changing business requirements and growth.

Question #9

What is the appropriate Solvency II solution for a large life insurance company with a
complex organizational structure which prefers to build internal models?

A. IBM Algorithmics Actuarial & Financial Modeler

B. IBM Solvency II Accelerator

C. IBM Algorithmics Economic Capital and Solvency II: Enterprise Edition

D. BM Algorithmics Economic Capital and Solvency II: Compliance and Reporting Edition

Question #10

Which one of the following is the key legislative driver for insurance companies and
pension funds to improve their risk management processes?

A. Basle II

B. Basle III

C. Solvency II

D. Dodd Frank

Explanation: Dodd-Frank: made changes in the American financial regulatory environment
that affect all federal financial regulatory agencies and almost every part of the nation's
financial services industry.
Incorrect:
Not A: Basel II, initially published in June 2004, was intended to create an international
standard for banking regulators to control how much capital banks need to put aside to
guard against the types of financial and operational risks banks (and the whole economy)
face.
Not B: Basel III (or the Third Basel Accord) is a global, voluntary regulatory standard on
bank capital adequacy, stress testing and market liquidity risk.
Not C: The Solvency II Directive 2009/138/EC is an EU Directive that codifies and
harmonises the EU insurance regulation.

Question #11

Which is the appropriate qualifying question for a prospect for the IBMAlgorithmics
Actuarial & Financial Modeler?

A. Are you struggling to adapt your current actuarial models to address new business requirements?

B. Are you building an internal model for Economic Capital or Solvency II?

C. What are your plans for consolidating input data from various systems'?

D. What methodology do you use to aggregate market and non-market risk?

Explanation: Algorithmics Actuarial and Financial Modeling provides a range of business
benefits, including:
* Advanced actuarial modeling to undertake the full spectrum of global actuarial
calculations, and address the challenges of real-world, principles-based modeling.
Supports regulatory compliance including Solvency II and other regimes.
* Scalable modeling and production infrastructureenables full transparency, audit, workflow
and control over the modeling process.
* Critical decision support enables more effective, risk-informed business strategies.
* Helps reduce actuarial costs and optimize ease of use with swift implementation and
processing speeds.
Note:
* Supports regulatory compliance
Enhances confidence with a secure modeling and production environment that supports
compliance across a range of risk-based regulatory and other supervisory regimes,
including Solvency II and IFRS.

Question #12

Which Solvency II solution is a stand-alone regulatory reporting system?

A. IBM Algorithmics Actuarial and Financial Modeler

B. IBM Algorithmics Portfolio Construction and RiskManagement for Fund Managers

C. IBM Solvency II Accelerator

D. IBM Algorithmics Economic Capital and Solvency II: Compliance & Reporting Edition

Explanation: Algorithmics Economic Capital and Solvency II solution supports all three
Pillars of Solvency II. Because it is available in two editions Compliance and Reporting,
and Enterprise it offers the opportunity to move from one to the other when you need to
scale up to more advanced analytics as your business or regulatory needs change.
Compliance and Reporting Edition
* Offers a pre-configured, robust and rapid implementation solution for Solvency II that
focuses on a Standard Formula approach. Provides you with the capabilities of Algo
Financial Modeler, a powerful actuarial and financial modeling engine, combined with a
workflow, governance and reporting tool to deliver an end-to-end solution for Solvency II
* Algo Financial Modeler can either calculate liability cashflows or act as an aggregation
layer to consolidate cashflows generated by existing actuarial systems.
* Offers the flexibility to scale up to the more advanced feature set of the Enterprise Edition
to meet the challenges of changing business requirements and growth.

Question #13

The IBM Algorithmics Economic Capital &Solvency II solution delivers the capabilities
required to support:

A. The implementation of centralized data repositories and the aggregation of information from systems across the enterprise.

B. The analytic capabilities required for Pillar I, thegovernance relative to Pillar I analytics and reporting relevant to Pillar I analytics

C. All 63 reports required by Solvency II including FSR

D. Local statutory reporting.

Explanation: Helps meet Solvency II regulations
Offers insurers a framework to help meet the challenges of the Three Pillars of Solvency II.
Provides advanced analytics for the calculation of solvency capital, as well as robust audit
control and reporting capabilities.
Note:
Algorithmics Economic Capital and Solvency II solution offers your firm a range of business
benefits with its powerful feature set. This solution:
* Helps meet Solvency II regulations with analytics for the calculation of solvency capital,
as well as workflow, governance and reporting capabilities.
* Supports better analysis and decision making with advanced business intelligence,
analytics and workflow tools.
* Facilitates solvency capital calculations through Standard Formula, partial and full internal
models.
* Offers asset and liability modeling, an economic scenario generator and covariance
matrix management.
* Helps reduce costs with support for rapid implementation tailored to your specific
requirements.

Question #14

What are the most likely organizations to be competing for control of a Solvency II
Compliance Initiative in a large complex insurance company'?

A. Actuarial Investment, IT, Finance,and Risk

B. Underwriting, Actuarial, Investment, Finance, and Risk

C. European Sales, Underwriting, IT, Finance, and Risk

D. Actuarial, HR, Investment, IT, and Risk

Question #15

What kind of Buy Side client is an insurance company or a pension fund?

A. Asset Owner

B. Asset Manager

C. Asset Servicer

D. Asset Seller

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