Setting up capital risk

From the Capital Allocation tab of the Profitability Configuration page in RPPS, you can set up capital risk groups and create a capital risk scale before assigning rates and before any capital allocation calculations can be done. The purpose of capital allocation is to provide a broad view of account measurement with insight into risk and profitability across all products.

NOTE: In the system, products are grouped into a capital risk group because multiple products are grouped by product characteristics. The use of groups means that all products in the same group have the same allocation rate. You can only assign one product to one capital risk group, but you are not required to assign new products to a capital risk group.

TIP: For more information, see Assigning capital risk.

Creating a capital risk group

To create a capital risk group:

1. In the Product Capital Risk Groups column, click + Add New Capital Risk Group.

2. In the Product Capital Risk Groups column, in the field, type a name for the Capital Risk Group.

   NOTE: The name must be a unique value.

3. At the top-right corner of the page, click Save .

NOTE: The values that display in the For Pricing Only column depend on the source of your data. If you imported your data from another source, such as Axiom, use the For Pricing Only slider to change the option from No to Yes for the relevant capital risk group(s).

Creating a capital risk scale

To create a capital risk scale:

1. In the Capital Risk Scale column, click Add New Capital Risk Scale.
2. In the Capital Risk Scale column, in the field, type a risk level name.
3. In the Capital Assigned column, type a percentage amount for capital assigned to that risk level.
4. At the top-right corner of the page, click Save .