Financial Risk Modelling Services

Award

Value

£2,800,000

Classifications

  • Financial and insurance services

Tags

  • award
  • contract

Published

1 year ago

Description

Homes England produces a range of macroeconomic forecasts on a quarterly basis.  These macroeconomic forecasts need to be translated into the impact on the portfolio, and used to quantify, understand, and manage the financial risk to the Agency.
Homes England manages a multi-billion-pound Recoverable Investment portfolio consisting of c. 300 loans.  The portfolio has been running since 2016 and is highly concentrated in the UK housing market with a skew towards small / medium housebuilders with limited financial and credit history, as well as special purpose vehicles (SPVs) set up to specifically to develop a site.  Security for the loans is typically provided by the land associated with the development.  Internal data for quantitatively estimating the impact of different macroeconomic scenarios on the various model parameters is limited.
A range of models including Expected Credit Loss models and Stress Testing models are used to quantify the financial risk of different macroeconomic scenarios on the Recoverable Investment portfolio.  The inputs into these models are generally Probability of Default estimates (both through the cycle and point in time), exposure at default estimates, and Loss Given Default estimates.  The regularly updated macroeconomic forecasts therefore need to be translated into these parameters for use in the various models.  The Quantitative Risk and Stress Testing team (QRS) at Homes England manages this process.
All loans are internally credit rated on origination and on a regular basis throughout the term of the loan.  The current process for producing the parameter estimates involves both quantitative analysis and qualitative assessment, converting the internal ratings into the required parameter estimates.  Homes England also subscribes to an external ratings agency  service to assist with benchmarking the estimates.
Homes England is seeking assistance on producing these estimates on an ongoing basis.  This requirement forms Lot 1: Financial Risk Parameter Estimation Services (£500k estimated value) of the Service.  See Appendix A: Lot 1 Service Scope.  It is envisaged that a single supplier will be appointed to lot 1.
Homes England is also seeking support in designing, building, and implementing additional financial and financial risk models to improve its understanding of the current portfolio, and to model new products and programmes.  This requirement forms Lot 2: Financial Risk Modelling Advisory Services (£500k estimated value).  See Appendix B: Lot 2 Service Scope. It is envisaged that there will be 4 suppliers appointed for lot 2.
Homes England designs, builds, and maintains a wide range of financial and financial risk models.  These models and methodologies are applied to a wide range of financial and risk management problems, including credit risk modelling, scenario analysis and forecasting, stress testing, and IFRS 9.  Homes England is also seeking external support to provide model validation and assurance services on these models.  This requirement forms Lot 3 Model Review and Validation Services (£300k estimated value).  See Appendix C: Lot 3 Service Scope. It is envisaged that a single supplier will be appointed to lot 3

Documents

Premium

Bypass the hassle of outdated portals. Get all the information you need right here, right now.

  • Contract Agreement

    The official contract terms, conditions, and scopes of work.

    Download
  • Award Notice

    Details on the tender award and selected suppliers.

    Download

Similar Contracts

Open

Building Insurance- City Wharf

The purpose of this tender is to incept a broker led insurance programme with a financially stable insurer with a financial rating of at least BBB or B++. We require Buildings, Landlords Contents and Property Owners Liability insurance for: •The Forge Building, 22 Wharf Road, N1 7GP Buildings, Declared Value: GBP 44,851,982. •The Saddler Building, 24 Wharf Road, N1 7GQ Buildings, Declared Value: GBP 25,721,499. •The Cooper Building, 36 Wharf Road, N1 7GR Buildings, Declared Value: GBP 23,453,061. •The Merchant Building, 38 Wharf Road, N1 7GS Buildings, Declared Value: GBP 18,042,146. •Property Owners Liability Limit of £50,000,000.00 (£50m) •All Four buildings form part of a single scheme known as City Wharf The Contract will be for an initial term of 3 years extendable at the Client's sole option for a period of up to 2 years, giving a total of 5 years (the Term). A2D’s aims and objectives are to: •Appoint a broker with suitable market access in order to achieve best value. •Appoint a financially stable insurer with a financial rating of at least BBB or B++. •Obtain cover for the full reinstatement value (plus Alternative Accommodation) for the scheme (City Wharf). •Enter into a long-term agreement with the option for A2D to cease such agreement in the event of improving market conditions and available capacity. •Achieve a fair premium (including Insurance Premium Tax) for A2D, its leaseholder’s and stakeholders. •Agree low and reasonable excesses for leaseholder claims. •Agree suitable claims handling processes for leaseholders, allowing them direct access for making claims. •Options for alternative excess, in order to consider these against alternative premiums. •Details of any remediation that MAY be required at a future date in order to reduce premiums. •An initial period of three months or 15 months to allow for an April renewal in either 2026 or 2027, and then to renew annual in April until the end of the term. In addition, the following forms part of this specification: •A skilled and competent service team, being Client Relationship Management, Insurance Claims management, Insurance Broking / underwriting and insurable risk managers. •Arrange suitable and appropriate insurance cover for the risks specified in this ITT and any other risks which might arise during the duration of the contract. •To undertake a continual review of the insurance programme, advising on cover, extensions, and new market products which would be of benefit to the Contracting Authority. •To offer technical support and advice on the interpretation of policy cover. •We will wish to consider your ability to give direct access to decision makers, including Underwriters and those responsible for Claims settlement decisions. •To meet with the Contracting Authority’s appointed person on an agreed frequency basis to review and discuss any issues relating to the provision of service, insured risks, and claims procedures. •To immediately notify the Contracting Authority of any changes to the contracted service including any changes to the Service Provider’s systems of delivery which might have an effect on the Association’s working procedures. •The Insurer will not alter, extend, or effect policy cover without the permission of the Management Team of the Contracting Authority or their nominated points of contact within the Contracting Authority. •To provide and agree details of procedures for major incidents and for the appointment of Loss Adjusters. •To provide and agree details of procedures for the notification of claims and the provision of documentation required. •To provide details of staff and management team together with details of experience, qualifications, and a structure chart together with the financial authorities of personnel involved in the handling of the Contracting Authority’s claims. •To agree with the Contracting Authority the panel of Solicitors, Loss Adjusters, and other experts to be appointed in the provision of the claims handling service. •To monitor the standards and costs of agreed Solicitors, Loss Adjuster and other experts used, advising the Contracting Authority of any proposed alterations, inclusions, or exclusions to the agreed panel and on what grounds. •To provide suitable claims data and reports. •To monitor insurance losses to identify areas of high risk and make recommendations on methods of controlling such losses. •The bidder agrees to provide a periodic review of the Insurance Programme and advice on new legislation, technical developments and new insurance products or services which would benefit of the Contracting Authority, throughout the currency of the contract. For more information about this opportunity, please visit the Delta eSourcing portal at: https://www.delta-esourcing.com/tenders/UK-UK-London:-Financial-and-insurance-services./5SP59MCUY5 To respond to this opportunity, please click here: https://www.delta-esourcing.com/respond/5SP59MCUY5

Katy Reed

Published 2 weeks ago

AI Bid Assistant

Our AI-powered tool to help you create winning bids is coming soon!

View Contract Source Save Contract

Timeline complete

Publish
Bid
Evaluate
Award
Complete