What is RORAC?
RORAC is just Return on Risk Adjusted Capital, which is another way to say Risk Adjust Return on Capital or RAROC. Both mean the same thing.
Risk-Based Pricing
Now more than ever, it is critical to the success of every finance company to be adequately compensated for the risk in its portfolio. A key step to this end is making sure the risk is priced in up front. It is no surprise, then, that Risk-Based Pricing has become the new standard.
Ivory has implemented many different risk-based pricing approaches – every company views and measures its risks differently; so, while there are certainly many factors all risk-based pricing approaches share, no two methodologies are going to be exactly the same.
With our decade-plus experience in building risk-based pricing models, Ivory is in a unique position to help guide your company. Whether you require a Return on Equity type yield with credit-score based loads or a leading edge Return on Risk-Adjusted Capital (RAROC) complete with automated risk and capital-allocation look-ups, Ivory’s is the experienced hand when it comes to getting your company the risk-based pricing it needs.
