How can tailored unemployment curves support your portfolio risk assessments and forecast for the future?

Understand how you are economically exposed

Rapidly rising levels of unemployment will be one of the greatest challenges to the UK’s recovery from the coronavirus crisis – and a major destabilising factor in many credit providers’ portfolios.

Protecting your business begins with building a clear picture of the specific risks you face, which is why we offer a unique solution to understanding estimated unemployment within your portfolio. By combining our market leading forecasting with CAIS data, we can map probable unemployment curves against Covid-19 economic scenarios, tailored directly to the customers you serve.

We’ve developed this capability through rigorous, extensive research, and each of the scenarios we create is stochastically modelled to make sure it remains unbiased and objective. The Prudential Regulatory Authority (PRA) advises that scenario modelling should always be reasonable, robust and supportable, and that’s been fundamental to our approach. Our tailored unemployment models curves can easily be dropped into your risk and forecasting models, simply replacing your macro level unemployment forecasts to give you a unique view of your pandemic-related risk exposure. They can also be dropped into your IFRS 9 processes to give you a unique view of your portfolios expected credit losses.

Watch the video below where Experian’s Mohammed Chaudhri, Chief Economist, discusses how tailored unemployment curves can support your portfolio risk assessments and forecast for the future.