dynamic financial analysis. Simulation technique based on integrated modeling used to analyze the entire financial and risk situation of an insurance enterprise over a defined period. DFA was developed in property/casualty insurance and is now also assuming growing importance for life insurers. It supports integrated corporate management by considering all risk factors (investments, underwriting side).
dynamic financial analysis. A form of scenario analysis, broader in scope than cash-flow testing, in which insurers use simulation modeling and multiple-scenario testing to project future values for an insurer's assets, liabilities, and owners' equity. See also scenario analysis.