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dynamic financial analysis (DFA)

Dynamic financial analysis is the name for a class of structural simulation risk model of insurance company operations, focusing on underwriting and financial risks, designed to generate financial pro forma projections.

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Statistical modeling techniques that project an outcome not on a static basis—that is, under one set of defined assumptions or the same assumption with one or two variables changed—but to project a range of possible outcomes assuming constant movements in interrelated variables.

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Monte Carlo simulation is one important technique that has emerged as crucial to effective risk...