Why We Are Different

The failure to identify real drivers of financial performance and risk has had disastrous consequences on the Financial Services industry.

These deficiencies explain why Predyct has been making extraordinarily accurate yet contrarian calls years ahead of the market for the last 15 years. This capability can assist corporate decision makers to seize opportunities while avoiding serious calamities.

The conventional measures of financial performance provide little information about companies’ shareholder value

Typical measures in use:

  • ROE
  • Earnings per Share Growth
  • Growth of Operating Earnings
  • A combination of the above

Less typical

  • EVA


A far better estimation of shareholder value is achieved when the real drivers of shareholder value are estimated


So why does traditional analysis avoid the application of this SVA framework?

This failure results because the SVA measures for ROE, Required Return and Growth are all dependent on being able to measure:

These are two of the most complex measures to perform in all finance and risk management. Most firms and analysts either do not know how to make these assessments or do not have the risk technology to perform these tasks.

Further complicating this process is that no one methodology can successfully measure risk. This is because risk presents firms with two very different problems:

These two problems require two unique solutions that must be solved in a consistent framework.

The two solutions:

  1. Cost of capital is primarily a finance issue and is solved in a shareholder value (finance) framework (SVA):
  2. Capital allocation is primarily a risk modeling exercise and is solved with stochastic (probabilistic) frameworks

Predyct Analytics is the only firm that solves these two problems in a fully consistent framework that we have named Predyct's Decision Framework (PDF).


Sharholder Value Analysis (SVA)

A forward-looking shareholder value model

  • Captures forward looking risk and value observations absent in historical data
  • Models each component of SVA framework
  • Calculates cost of capital and Embedded Value
  • Benchmarks company to peers based on SVA

       Convergent Decision Point

Enterprise Risk Model

A rigourously integrated full valuation engine

  • Models variability of a firm’s net worth
  • Based on VaR Full Valuation simulation technology
  • Complete scenario and stress testing capability
  • Benchmarking capability
  • Parameterized with ten years of data for all assets and liabilities

Our platform capabilities can be a “game changer” in the way insurance and asset management companies are evaluated and rated