Real Actuarial Consulting Limited

Should you accept it as the way of doing business? Catastrophic events can destroy your company and they will happen much more than you expected. Why worry only about the downside risks? Missing upside opportunities are also risks.

Traditional Net Present Value (NPV) / Discounted Cash Flow (DCF) analyses can only provide a static picture of a current situation, and it provides little insight into possible consequences. The inability of these traditional analyses to take future risks and business flexibilities into account mean that businesses often make poor decisions based on flawed information.

Scenario analysis is also a common system of deducing risk management. This method evolved into various forms based on the needs of each industry, past experience and guess work. But this technique does not allow firms to obtain any degree of certainty. As a result, important decisions are made by guesswork, lowest potential losses or the shortest return to profitability. The optimal decisions are often disregarded because of flawed decision analysis.

You will need a more powerful integrated methodology to quantify and to manage risks. At Real Consulting, we are not satisfied with traditional methodologies. Using cutting edge technologies, we run millions of simulations to determine every possible outcome and the likelihood of them occurring. Our analysis enables clients to formulate strategies to determine optimal decisions or to hedge against future events, whatever they may be.

By combining our risk expertise with our full range of actuarial and investment advisory services, we are able to provide your business with the information it needs to get the most out of the future. Expert risk management can make the difference between capitalising on a risky opportunity and avoiding a catastrophe. Real Consulting has the proven expertise and experience to analyse risks and manage them to your best advantage.

"Unfortunately, the financial tool most widely relied on to estimate the value of a strategy is the discounted cash flow which assumes that we will follow a predetermined plan regardless of how events unfold. A better approach to valuation would incorporate both the uncertainty inherent in business and the active decision making required for a strategy to succeed. It would help executives to think strategically on their feet by capturing the value of doing just that - of managing actively rather than passively and real options can deliver that extra insight."
- Harvard Business Review (September/October 1998)

"The real options revolution in decision making is the next big thing to sell to clients and has the potential to be the next major business breakthrough."
- Business Week (June 1999)

"Doing this analysis has provided a lot of intuition you didn't have in the past… and that as it takes hold, it's clear that a new generation of business analysts will be schooled in options thinking. Silicon Valley is fast embracing the concepts of real options analytics, in its tradition of fail fast so that other options may be sought after."
- Business Week (June 1999)

"With the degree of change going on in industry, the old models just don't work anymore… one promising tool for determining the strategic worth of an acquisition is Real Options Valuation."
- Industry Week (December 6, 1999)

"In contrast, the beauty of Real Options theory - an approach that ties the value of small initial investments to later opportunities for big payoffs - is that it works well with uncertainty and encourages management flexibility."
- Industry Week (December 6, 1999)

"Real options provide a powerful way of thinking and I can't think of any analytical framework that has been of more use to me in the past 15 years that I've been in this business."
- Bloomberg Wealth Manager (November 201)