Roles

Risk Management

 

Helping Chief Risk Officers and Risk Managers accurately risk manage energy and commodity portfolios, providing a full understanding of risk factors and sensitivities

Your Challenges

Time and resource intensive daily Value-at-Risk (VaR) calculation and risk reporting

An inability to drill down to enough granular detail into your portfolio risk number

Insufficient audit, error tracking and documentation

Risk processes open to ‘key person risk’

Limited visibility into the drivers of VaR and insufficient stress testing capabilities

‘Off-system’ work arounds to capture and risk manage structured deals

Obtaining consistency between front office and risk valuations

Calculating a global or portfolio VaR with multiple C/ETRM and deal capture systems and a mix of physical assets and financial contracts

Using industry-specific models that account for mean reversion, jumps, seasonality and co-movements in commodity prices

Scaling for business change and growth with inflexible incumbent systems

Opportunity

As a senior risk professional, it is vital that you have an up-to-date, accurate and granular picture of risks within your organisation.

Having a risk team that can react quickly to market events is vital for your ability to capitalise on the best trading opportunities as they arise. You need confidence in the risk numbers produced and be able to identify hotspots so your portfolio can be analysed for further action and so that daily risk changes can be explained to senior management.

Maximise your profit potential by making more informed decisions using superior innovative analytics. Support decisions with accurate, timely information with a deep dive analysis to understand the drivers of the numbers so they can be explained to senior management.

Confidence comes from using specialised, award winning models and methodologies that reflect real-world industry specific market dynamics enabling a wide range of energy and commodity derivatives to be valued quickly and accurately.

Solution

Lacima offers two solutions: Lacima Trader and Lacima Analytics – providing a complete solution from trading to risk management using the same consistent models and methodologies tailored to the unique market characteristics of energy and commodities markets.

Lacima’s solutions offer a range of business benefits including:

  • Single source of ‘risk truth’ by aggregating data from multiple C/ETRMs and deal capture systems to report an accurate and comprehensive picture of risk
  • Drill down to reveal risk concentration and drivers of day-on-day changes via VaR attribution reports
  • Slice and dice results to yield valuable insights and report component and incremental VaR, as well as expected loss
  • Handle cross commodity exposures including power, gas, oil & products, LNG, metals, soft commodities and others, in a single system
  • Model physical assets such as thermal, wind, hydro, and solar power plants, as well as gas storage facilities, oil refineries, pipelines, and other assets
  • Consolidate market and credit risk metrics, and understand collateral exposure all in the same risk and modelling framework
  • Achieve consistency between the models and methodologies used to price deals and manage risk
  • Choose from a range of modelling frameworks that best describe your view of market dynamics