Under the terms of the deal, both companies will integrate their respective technologies as a jointly marketed and sold offering.
New York-based DFA, which stands for Dynamic Financial Analysis, develops a suite of decision modeling and value and econometric simulation software that will be integrated with Teradata’s enterprise risk management platform built on top of the Teradata Warehouse 8.2 platform.
The joint offering will be targeted primarily at property, casualty and life insurance firms in North America and Europe, helping them to make accurate decisions, meet regulatory compliance and allocate capital resources better.
We want to provide a holistic approach to managing the capital of the insurance organizations, said Lisa Cash, executive vice president of marketing at DFA. And that involves all the data in the organization – policies written, payouts on policies, etc.
One of the problems is the disparate data infrastructure of insurance firms that has been complicated by past acquisitions and old, legacy systems. That’s as much a problem for making good decisions, Cash said. Hence it makes sense to partner with Teradata to bring a whole solution to market, where we provide the applications and Teradata the data management infrastructure.
Cash said that DFA’s applications are intended for sophisticated a what-if analysis to support complex decision making. Some insurance firms need to understand and predict behavior up to 30 years in advance, she said. Our software generates the economic scenarios to run models against to understand the level of risk when making a decision such as which product to go to market with and where capital investments should be made.
She added that a key differentiator over other simulation tools is that DFA’s tools embed management decision making to appropriately model the business according to the context of different user perspectives and analytic needs.
DFA was founded in 1999 and employs around 40 staff. It also has offices in Germany and Switzerland.
This is the first partnership between the two firms. Cash however expects to work closely with Teradata going forward to refine Teradata’s logical data model for financial services that also supports Teradata’s own risk management offerings.
One of the things we bring to the table is our considerable domain expertise in insurance. We have dozens of economists and actuaries on staff, Cash said.
Teradata recently announced that it is splitting from Dayton, Ohio-based parent firm NCR which makes ATMs and retail point-of-sale hardware.
