Description
Washington Goren Hodges
1
Technology Section
2007 Accomplishments
Review of Goals
Membership
Networking
Information Sharing
Publications
Professional Education
Research
2
Membership
Our numbers are slightly down from last year
Retention is 83%
Down 83 members (1493 to 1410)
Previous year, lost 116 members
We have identified some strategies to counteract
the continued decline
Actively recruit non-actuaries in IT roles in insurance
companies
Recruit non-SOA actuaries
Maintain membership by having database of engaged
section members
Networking
Goal is to provide more situations where like-
minded Technology Section members can share
information
Social events pursued at Spring meetings and
LTC meeting
Free Lunch at annual meeting
Engagement –we recruited 5 quality candidates
for Council elections
3
Information Sharing
A collaboration portal has been set up, and
subcommittees of the Technology section have
begun to use it (Kevin)
With the SOA website redesign, a review of the
Technology content was required and updates
have been made (Dean)
Reached out to other sections for ideas:
Taxation section’s work on syllabus updates
Marketing & Distribution’s expert database
Publications
For the second consecutive year, we’ve published
4 newsletters (Shyamal)
We had a “best article” contest
Tech updates were published in Dec, Feb, May,
July
Our 7
th
speculative fiction contest was held, with
continued great participation (Gary Lange)
4
Professional Education
Our first webinar was successfully held –topic
was Record Linkage (Van)
Education Subcommittee formed to evaluate
formal education requirements on the subject of
Technology (ShielaSilva and Carol Marlor –
charter members)
Spring meetings (Tim), LTC meeting (Kevin), and
Annual meeting (David) had technology
sponsored sessions
Research
A standard format is being created for Scenario
sets used in actuarial work (Steve Strommen)
The Rate Manager tool is getting a fresh review
and a plan for ongoing maintenance will be put in
place (Joe)
The SOA membership was surveyed to
understand the technology needs of actuaries
(Carl)
5
SOA Activities
With the establishment of financial guidelines for
all sections, the Technology Section put together a
budget for 2007
The meeting sessions we’ve created are aligning
with the Value Ladder concept
CPD requirements for SOA members will
encourage some actuaries to pursue more
technology education
Parting Words as Chair
So much talent and interest in contributing to the
section –many people are just waiting to be asked
Take advantage of leadership events sponsored
by the SOA –Section Chairs meetings have been
most rewarding –participate while Vice Chair if
possible
Don’t lose momentum. Thanks to Phil for jump-
starting the section last year
6
Parting Words as Chair (cont.)
My personal goals for the year:
Stay engaged in the Section
Enroll every person on the chair, actively leading some
activity for the section
Engage additional section members, beyond the
Council, in committee work
My hopes:
The Technology Section becomes an integral part of
the SOA. If we stopped what we’re doing, will anyone
notice? I hope the answer becomes a stronger “YES”
1
Click to edit Master title style
!@#
SOA 2007 Annual Meeting - Washington, D.C.
October 14 - 17, 2007
www.ey.com/us/actuarial
Insurance and Actuarial
Advisory Services
Business Intelligence For Actuaries Business Intelligence For Actuaries
Steve Goren and Tim Pauza
©2007 Ernst &Young LLP
Agenda
Introduction – Why Business Intelligence is Important
Audience Survey
Business Intelligence Defined
Key Business and Organizational Challenges
Business Intelligence
– Making it Happen – Team and Approach
– Establishing an Infrastructure
– Repositories
– Presentation Tools
– Applications
Discussion
2
©2007 Ernst &Young LLP
Audience Survey
Show of hands…
How many in the room are familiar with the concept of
Business Intelligence (BI)?
How many of you are actively involved in Business
Intelligence projects in your actuarial departments?
How satisfied is senior management with the actuarial
area’s analysis and explanation of results in valuation
and financial reporting, and planning and forecasting?
©2007 Ernst &Young LLP
Business Intelligence Defined
The application of tools, technologies, and
processes to a company’s data that enable
improved analysis and reporting capabilities
resulting in actionable business insight
3
©2007 Ernst &Young LLP
Where we are…
Actuaries have difficulty communicating and/or explaining their
findings in a timely manner
CFOs are frustrated by lack of clarity and actionable
recommendations from actuarial department
We have lost credibility
– Missed opportunities when talking to senior management
– Valuation and modeling engines are great, but reporting from them is
awkward and labor intensive
– Unable to explain results due to excessive volatility
– Poor response time to emerging trends and issues
Key Business and Organizational Challenges
(Continued)
©2007 Ernst &Young LLP
How we got here…
Processes and systems that do not support what we are trying to
deliver
– Labor intensive – leaving little or no time for analysis
– Reporting and analysis tools are weak
– Cumbersome to answer questions about what goes into a reported
number
– Overuse of spreadsheets for everything from data manipulation to
reporting
Added complexity
– New products with a wide array of options and guarantees
– Valuation requirements
– Risk management practices
Increased data volume
– Company consolidations and growth
– Expanded reporting demands of stochastic approaches
Key Business and Organizational Challenges
(Continued)
4
©2007 Ernst &Young LLP
Where we need to be…
Able to explain the drivers of financial results with
respect to volatility
Confident in financial results
– CFOs are demanding greater transparency of results
– Senior management also expects clarity and timely actionable
recommendations from actuaries
Refocused on analysis – essential if we want to meet
these challenges and regain the confidence of our
customers
Key Business and Organizational Challenges
©2007 Ernst &Young LLP
Business Intelligence – Making it Happen –
Team and Approach
The team
– Collaboration between Actuarial and IT
• Business and technology representatives
• Project management
Project approach
– Requirements and data architecture
– Technical and application architecture
– Build, test, and roll out
5
©2007 Ernst &Young LLP
Critical Success Factors
– Ease of use
– Appropriate IT/Actuarial interdependence
• Ongoing commitment to support from IT
• Limited reliance on IT – business people can work effectively
within environment
– Rapid deployment
– Reduced cost – system should pay for itself in saved
time and improved business decisions
– Reduced cycle time – reporting automated, which
leaves more time for analysis and decision support
– Improved depth of business insight – drill-down, slice-n-
dice, ad hoc reporting, all aid deeper analysis
Business Intelligence – Establishing an Infrastructure
(Continued)
©2007 Ernst &Young LLP
Accounting
Systems
Admin
Systems
Assumptions
Actuarial
Data Repository
Modeling Engines
Valuation Engines
Actuarial
Anal ysis
Repository
Accounting
Automated and Controlled Environment
Data Integration and Improvement High Performance Computing Advanced Decision Support
Assumption
Management
Mgmt. Reports
Analytics
Validation
BI for
Actuaries
Input
Management
Business Intelligence – Establishing an Infrastructure
Source: Ernst & Young Insurance and Actuarial Advisory Services
6
©2007 Ernst &Young LLP
Policy Information Repository
Monthly snapshots of policy data on a policy coverage basis
Primary source for policy counts, coverage amounts, premiums, and
reserves. This will be the source for model cells based on actual
data
Data from multiple sources can be integrated using “push”or “pull”
methodology
Data quality can be improved by implementing technology-based
data integrity controls to reconcile account values
Provides a method to remove/adjust inappropriate policy data in a
controlled fashion
Reused by multiple models
(Continued)
Business Intelligence – Repositories
©2007 Ernst &Young LLP
Assumption Repository
Assumption sets for current and previous periods are maintained
outside of the modeling engine
All corporate assumptions
– Liability experience assumptions
– Reinvestment/disinvestment specifications
– Economic scenario assumptions
May reside in either a structured (i.e., database) or unstructured
(i.e., Lotus Notes) repository
Controlled and shareable among multiple modeling teams
Governance process exists to review, modify, and approve
assumptions in a flexible, yet controlled, and auditable environment
(Continued)
Business Intelligence – Repositories
7
©2007 Ernst &Young LLP
Product Specifications Repository
Similar to assumptions, product specifications
(premium rates, COI charges) are maintained
separately from the model
Product specifications are not likely to change after
pricing has been completed and are input into the
product specification repository only once
Similar storage and access options are available as
with assumptions
Changes to product specifications will be possible, but
much less common
Business Intelligence – Repositories
(Continued)
©2007 Ernst &Young LLP
Analysis and Reporting Repository
Business Intelligence reporting systems are very powerful
– Mainstream tools are flexible and provide graphical representations of
the data structures without requiring the technical knowledge to
manipulate data within the database
Data is structured differently to support the various types of reporting
and analysis requirements
– Relational structures at various levels of granularity
– Multi-dimensional cubes to provide the ability to view aggregated data
from different perspectives
Validation controls are provided in this database-centric environment
Business Intelligence – Repositories
8
©2007 Ernst &Young LLP
BI Toolbox
Extract, Transform, and Load (ETL)
Data Store
Reporting
Actuarial
Anal ysis
Repository
Accounting
Advanced Decision Support
Mgmt. Reports
Analytics
Automated
Standard
Reports
ETL*
Valuation
Engine
Modeling
Engine
Assumptions
Controls
Validation
Dashboard
(KPIs)
Ad Hoc
Reports
Slice-n-dice
Drill-down
User-friendly
interface
Data mining
RDBMS*
OLAP*
Business Intelligence
– Presentation Tools
*Extract, Transform, and Load (ETL)
*On-Line Analytical Processing (OLAP)
*Relational Database Management System(RDBMS)
(Continued)
Source: Ernst & Young Insurance and Actuarial Advisory Services
©2007 Ernst &Young LLP
Business Intelligence – Presentation Tools
Different types for different purposes:
Reporting
– Ad hoc and production
Analysis
– Graphical interface to SQL-generated queries
– On-Line Analytical Processing (OLAP) – multidimensional cubes
for slicing data across different dimensions, such as by product
or time
Dashboards
Suites – Cognos, Business Objects and Hyperion
Production reporting – Actuate
9
©2007 Ernst &Young LLP
Business Intelligence – Applications
Improve efficiency of reporting to free time for
analysis
– Automated data handling, static reports, and control reports
Experience studies and trend analysis
Financial reporting
– Static reporting of reserves, DAC, etc.
– Drill-down/slice-n-dice to explain deltas
– Ad hoc reports against reserve data to answer management
questions
– Controlled top-side adjustments
Planning and forecasting
ERM support
©2007 Ernst &Young LLP
Discussion
Q & A
Audience experience
doc_416948630.pdf
Washington Goren Hodges
1
Technology Section
2007 Accomplishments
Review of Goals
Membership
Networking
Information Sharing
Publications
Professional Education
Research
2
Membership
Our numbers are slightly down from last year
Retention is 83%
Down 83 members (1493 to 1410)
Previous year, lost 116 members
We have identified some strategies to counteract
the continued decline
Actively recruit non-actuaries in IT roles in insurance
companies
Recruit non-SOA actuaries
Maintain membership by having database of engaged
section members
Networking
Goal is to provide more situations where like-
minded Technology Section members can share
information
Social events pursued at Spring meetings and
LTC meeting
Free Lunch at annual meeting
Engagement –we recruited 5 quality candidates
for Council elections
3
Information Sharing
A collaboration portal has been set up, and
subcommittees of the Technology section have
begun to use it (Kevin)
With the SOA website redesign, a review of the
Technology content was required and updates
have been made (Dean)
Reached out to other sections for ideas:
Taxation section’s work on syllabus updates
Marketing & Distribution’s expert database
Publications
For the second consecutive year, we’ve published
4 newsletters (Shyamal)
We had a “best article” contest
Tech updates were published in Dec, Feb, May,
July
Our 7
th
speculative fiction contest was held, with
continued great participation (Gary Lange)
4
Professional Education
Our first webinar was successfully held –topic
was Record Linkage (Van)
Education Subcommittee formed to evaluate
formal education requirements on the subject of
Technology (ShielaSilva and Carol Marlor –
charter members)
Spring meetings (Tim), LTC meeting (Kevin), and
Annual meeting (David) had technology
sponsored sessions
Research
A standard format is being created for Scenario
sets used in actuarial work (Steve Strommen)
The Rate Manager tool is getting a fresh review
and a plan for ongoing maintenance will be put in
place (Joe)
The SOA membership was surveyed to
understand the technology needs of actuaries
(Carl)
5
SOA Activities
With the establishment of financial guidelines for
all sections, the Technology Section put together a
budget for 2007
The meeting sessions we’ve created are aligning
with the Value Ladder concept
CPD requirements for SOA members will
encourage some actuaries to pursue more
technology education
Parting Words as Chair
So much talent and interest in contributing to the
section –many people are just waiting to be asked
Take advantage of leadership events sponsored
by the SOA –Section Chairs meetings have been
most rewarding –participate while Vice Chair if
possible
Don’t lose momentum. Thanks to Phil for jump-
starting the section last year
6
Parting Words as Chair (cont.)
My personal goals for the year:
Stay engaged in the Section
Enroll every person on the chair, actively leading some
activity for the section
Engage additional section members, beyond the
Council, in committee work
My hopes:
The Technology Section becomes an integral part of
the SOA. If we stopped what we’re doing, will anyone
notice? I hope the answer becomes a stronger “YES”
1
Click to edit Master title style
!@#
SOA 2007 Annual Meeting - Washington, D.C.
October 14 - 17, 2007
www.ey.com/us/actuarial
Insurance and Actuarial
Advisory Services
Business Intelligence For Actuaries Business Intelligence For Actuaries
Steve Goren and Tim Pauza
©2007 Ernst &Young LLP
Agenda
Introduction – Why Business Intelligence is Important
Audience Survey
Business Intelligence Defined
Key Business and Organizational Challenges
Business Intelligence
– Making it Happen – Team and Approach
– Establishing an Infrastructure
– Repositories
– Presentation Tools
– Applications
Discussion
2
©2007 Ernst &Young LLP
Audience Survey
Show of hands…
How many in the room are familiar with the concept of
Business Intelligence (BI)?
How many of you are actively involved in Business
Intelligence projects in your actuarial departments?
How satisfied is senior management with the actuarial
area’s analysis and explanation of results in valuation
and financial reporting, and planning and forecasting?
©2007 Ernst &Young LLP
Business Intelligence Defined
The application of tools, technologies, and
processes to a company’s data that enable
improved analysis and reporting capabilities
resulting in actionable business insight
3
©2007 Ernst &Young LLP
Where we are…
Actuaries have difficulty communicating and/or explaining their
findings in a timely manner
CFOs are frustrated by lack of clarity and actionable
recommendations from actuarial department
We have lost credibility
– Missed opportunities when talking to senior management
– Valuation and modeling engines are great, but reporting from them is
awkward and labor intensive
– Unable to explain results due to excessive volatility
– Poor response time to emerging trends and issues
Key Business and Organizational Challenges
(Continued)
©2007 Ernst &Young LLP
How we got here…
Processes and systems that do not support what we are trying to
deliver
– Labor intensive – leaving little or no time for analysis
– Reporting and analysis tools are weak
– Cumbersome to answer questions about what goes into a reported
number
– Overuse of spreadsheets for everything from data manipulation to
reporting
Added complexity
– New products with a wide array of options and guarantees
– Valuation requirements
– Risk management practices
Increased data volume
– Company consolidations and growth
– Expanded reporting demands of stochastic approaches
Key Business and Organizational Challenges
(Continued)
4
©2007 Ernst &Young LLP
Where we need to be…
Able to explain the drivers of financial results with
respect to volatility
Confident in financial results
– CFOs are demanding greater transparency of results
– Senior management also expects clarity and timely actionable
recommendations from actuaries
Refocused on analysis – essential if we want to meet
these challenges and regain the confidence of our
customers
Key Business and Organizational Challenges
©2007 Ernst &Young LLP
Business Intelligence – Making it Happen –
Team and Approach
The team
– Collaboration between Actuarial and IT
• Business and technology representatives
• Project management
Project approach
– Requirements and data architecture
– Technical and application architecture
– Build, test, and roll out
5
©2007 Ernst &Young LLP
Critical Success Factors
– Ease of use
– Appropriate IT/Actuarial interdependence
• Ongoing commitment to support from IT
• Limited reliance on IT – business people can work effectively
within environment
– Rapid deployment
– Reduced cost – system should pay for itself in saved
time and improved business decisions
– Reduced cycle time – reporting automated, which
leaves more time for analysis and decision support
– Improved depth of business insight – drill-down, slice-n-
dice, ad hoc reporting, all aid deeper analysis
Business Intelligence – Establishing an Infrastructure
(Continued)
©2007 Ernst &Young LLP
Accounting
Systems
Admin
Systems
Assumptions
Actuarial
Data Repository
Modeling Engines
Valuation Engines
Actuarial
Anal ysis
Repository
Accounting
Automated and Controlled Environment
Data Integration and Improvement High Performance Computing Advanced Decision Support
Assumption
Management
Mgmt. Reports
Analytics
Validation
BI for
Actuaries
Input
Management
Business Intelligence – Establishing an Infrastructure
Source: Ernst & Young Insurance and Actuarial Advisory Services
6
©2007 Ernst &Young LLP
Policy Information Repository
Monthly snapshots of policy data on a policy coverage basis
Primary source for policy counts, coverage amounts, premiums, and
reserves. This will be the source for model cells based on actual
data
Data from multiple sources can be integrated using “push”or “pull”
methodology
Data quality can be improved by implementing technology-based
data integrity controls to reconcile account values
Provides a method to remove/adjust inappropriate policy data in a
controlled fashion
Reused by multiple models
(Continued)
Business Intelligence – Repositories
©2007 Ernst &Young LLP
Assumption Repository
Assumption sets for current and previous periods are maintained
outside of the modeling engine
All corporate assumptions
– Liability experience assumptions
– Reinvestment/disinvestment specifications
– Economic scenario assumptions
May reside in either a structured (i.e., database) or unstructured
(i.e., Lotus Notes) repository
Controlled and shareable among multiple modeling teams
Governance process exists to review, modify, and approve
assumptions in a flexible, yet controlled, and auditable environment
(Continued)
Business Intelligence – Repositories
7
©2007 Ernst &Young LLP
Product Specifications Repository
Similar to assumptions, product specifications
(premium rates, COI charges) are maintained
separately from the model
Product specifications are not likely to change after
pricing has been completed and are input into the
product specification repository only once
Similar storage and access options are available as
with assumptions
Changes to product specifications will be possible, but
much less common
Business Intelligence – Repositories
(Continued)
©2007 Ernst &Young LLP
Analysis and Reporting Repository
Business Intelligence reporting systems are very powerful
– Mainstream tools are flexible and provide graphical representations of
the data structures without requiring the technical knowledge to
manipulate data within the database
Data is structured differently to support the various types of reporting
and analysis requirements
– Relational structures at various levels of granularity
– Multi-dimensional cubes to provide the ability to view aggregated data
from different perspectives
Validation controls are provided in this database-centric environment
Business Intelligence – Repositories
8
©2007 Ernst &Young LLP
BI Toolbox
Extract, Transform, and Load (ETL)
Data Store
Reporting
Actuarial
Anal ysis
Repository
Accounting
Advanced Decision Support
Mgmt. Reports
Analytics
Automated
Standard
Reports
ETL*
Valuation
Engine
Modeling
Engine
Assumptions
Controls
Validation
Dashboard
(KPIs)
Ad Hoc
Reports
Slice-n-dice
Drill-down
User-friendly
interface
Data mining
RDBMS*
OLAP*
Business Intelligence
– Presentation Tools
*Extract, Transform, and Load (ETL)
*On-Line Analytical Processing (OLAP)
*Relational Database Management System(RDBMS)
(Continued)
Source: Ernst & Young Insurance and Actuarial Advisory Services
©2007 Ernst &Young LLP
Business Intelligence – Presentation Tools
Different types for different purposes:
Reporting
– Ad hoc and production
Analysis
– Graphical interface to SQL-generated queries
– On-Line Analytical Processing (OLAP) – multidimensional cubes
for slicing data across different dimensions, such as by product
or time
Dashboards
Suites – Cognos, Business Objects and Hyperion
Production reporting – Actuate
9
©2007 Ernst &Young LLP
Business Intelligence – Applications
Improve efficiency of reporting to free time for
analysis
– Automated data handling, static reports, and control reports
Experience studies and trend analysis
Financial reporting
– Static reporting of reserves, DAC, etc.
– Drill-down/slice-n-dice to explain deltas
– Ad hoc reports against reserve data to answer management
questions
– Controlled top-side adjustments
Planning and forecasting
ERM support
©2007 Ernst &Young LLP
Discussion
Q & A
Audience experience
doc_416948630.pdf