DFA Capital Management Launches Dynamic Financial Management Solution for the Insurance Industry

DFA Capital Management Inc. announced today that it has designed and is now marketing its Dynamic Financial Management solution, a software-based management system for insurance operations. This software application provides a reliable, convenient solution for all aspects of financial management for the insurance industry, including reinsurance, risk management and capital management. It is the first commercially available ready-to-use dynamic financial analysis product for deployment at the enterprise level.

Using a fully realized simulation engine coupled with a comprehensive database and risk modeling tools that embrace best practices developed through years of experience in the industry, the solution allows insurers to accurately mitigate risk, realize significant savings on reinsurance premiums through accurate and extensive modeling, price product to reflect incremental risk assumed and improve overall capital management.

"With Dynamic Financial Management (DFMSM) the entire enterprise becomes aligned around the process of value-driven financial decision-making," said Markus Rohrbasser, president and co-founder of DFA Capital Management. "DFM will improve strategic planning by clearly identifying the best and worst performing products and lines of business, thereby allowing corporate managers of major insurance companies to develop the best business portfolio with a clearly defined financial and competitive strategy."

Using DFM, risk managers will reduce financial exposure by accurately projecting the risks associated with any line of their business portfolio, taking into account the interdependency of all variables. Financial managers will improve investment objectives and strategies, manage investment risks and improve cash flow.

DFM allows capital managers to improve the capital structure by providing the timely information they need to manage cash flow and identify needed funding for future growth.

"DFM exceeded even our wildest expectations, both in its performance and its delivery of promised benefits," said John McCartney, CFO of Zurich North America Business Division and former CEO of Empire Fire and Marine Insurance Companies, an early user of the solution. "It is the first commercially available, detailed dynamic financial analysis product out there. We anticipate using this valuable tool to greatly enhance our decision-making in capital allocation, risk management and reinsurance purchasing as we prepare for the next market cycle."

Zurich North America Business Division has a highly diversified business portfolio covering the broad spectrum of commercial insurance. With an estimated premium volume of $12 billion for the year 2002, Zurich North America is one of the largest players in this sector of the property and casualty market.

"In the coming months, we will deploy the DFM technology across the entire organization to implement an enterprise level financial- and risk-management platform," explained Wayne Fisher, chief actuary and chief risk officer of Zurich North America.

By supplanting discrete desktop applications, spreadsheets and isolated departmental procedures, DFMSM eliminates "information silos" and ad hoc approaches, replacing those often-counterproductive methods with a consistent, enterprise-wide approach to financial management that achieves unprecedented levels of accuracy, consistency and reliability.

"Insurers can no longer rely on outdated methodologies to make critical business decisions," said Chuck Johnston, vice president and director of insurance information strategies for META Group. "Today's changed world demands that highest level of visibility and accuracy when assessing risk and managing assets."

DFM features include:

• A high-performance database of all key assumptions used by financial decision-makers throughout the enterprise
• A robust simulation engine that provides consistent in-depth modeling of the financial markets and macro-economy,
  and of the behavior of the company and its performance under these conditions
• Powerful analytics that allow decision-makers to examine the future consequences of decisions made today

DFM also provides a full range of reporting capabilities, transforming a company from a reactive business responding to events to a focused, proactive enterprise in full command of its own interests — armed with the accurate and timely information needed to successfully navigate today's volatile insurance marketplace.

DFM empowers management to optimize the dynamic relationship among risk, capital and value, and to establish common performance metrics and a common risk-management culture throughout the company. DFMSM revolutionizes the decision process by providing a comprehensive, detailed and fully integrated financial model of the entire insurance company.

"Our DFM solution not only streamlines and improves all aspects of financial management, it creates immediate value by lowering capital costs through improved utilization," explained Rohrbasser. "We are confident that the typical client will achieve significant ROI within one year of full deployment."

About DFA Capital Management Inc.

DFA Capital Management Inc. is the market leader in dynamic financial analysis software for the insurance and financial services industries. DFA’s software-based financial and risk management system is a foundation for competitive advantage for any insurance company with multiple business lines, reinsurance activities, rapidly changing business portfolios, and significant premium volumes.

Founded in 1999, DFA Capital Management Inc. is headquartered in Purchase, N.Y., with offices in Germany and Switzerland.

For media inquiries, contact:

Kathleen Sheridan
Stanton Crenshaw Communications
Tel: +1 212.780.1900
ksheridan@stantoncrenshaw.com

Karen Verelley
Vice President, Marketing
DFA Capital Management
Tel: +1 914.701.7238
Cell: +1 203.856.7273
karen.verelley@dfa.com