Let Me See: Visualizing Actuarial Information

Aleksey Popelyukhin, Ph.D.Vice President, Information Systems & Technology

aleksey@commrisk.com

COMMERCIAL RISK

Actuarial Process

Data Collection, Cleanup and Transformation Application of Agorithms and Methods Representation of Results

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Actuarial Process

1

AlgorithmsResults

Data

Ideal Actuarial System

An ideal actuarial processing solution is a a) transparent to users and b) highly efficient storage/retrieval system for c) structured actuarial data (objects) with d) an extremely flexible, e) computationally complete, f) open calculation engine and g) integrated, h) automated and i) interactivereport generator

2

Actuarially-Centric Systems

Insurance companies build their computer systems around their strengths: Claims Accounting Underwriting

Actuarial Functionality is always an afterthought 2a

Human perception

Relies heavily on Short-Term Memory.Problems with STM: Can hold only 5-7 similar similar items at

once It’s a “buffer”: new info erases old

information Even without distractions can hold info only

for 30 seconds 2b

Data-Driven Technologies

2c

Adaptive Reporting Visualization Alarm Systems

Adaptive Reporting

Adaptive Reporting Filtering Sorting Outlining Conditional Formatting OLAP-enabled tools

2d

Adaptive Reporting: Filtering

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Auto-Filter in Excel Plain-Vanilla Filtering Checking Distinct Values Adaptive Filtering (through VBA)

Adaptive Reporting: Outlining

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Outlining in Excel Hierarchical view Different level of details Subtotals

Master-Detail relationship in Access

Adaptive Reporting: Sorting

5

Does not reduce amount of information displayed

Brings most important info on top or up front

Requires definition of importance

Adaptive Reporting: Dynamic Formatting

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Conditional Formatting in Excel allows users to define

font color border background pattern

of a cell as a function of the values in other cells

Adaptive Reporting: OLAP(Online Analitycal Processing)

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Pivot Tables and OLAP cubes in Excel Combine

Filtering Outlining Sorting

Add on-the-fly processing Calculated Field Calculated Item

Data Source is not limited by 65,536 rows

Visualization: Charts

8

There is a chart for every occasion: line chart for displaying increases bar for shares pedestal for ranks Gantt for schedules

But what about actuarial triangles?

Visualization: Charts

8a1989

1990

1991

1992

1993

1994

1995

1996

1997

24 - 36

60 - 72

96 - 1081.000

1.050

1.100

1.150

1.200

1.250

Visualization: Maps

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Maps in Microsoft MapPoint: Colors Shapes Glyphs Isosurfaces

Links to Office applications VBA

Visualization: Animation

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If a picture is worth a thousand words, thenan animation is worth a thousand pictures “selective attention”: people react on any

movement (change in color, shape or position) display of different stages in the motion displacement plots time animations streamlines (traces)

For actuaries: iterations of simulation!

Visualization: Visual Tools

11

Making actuarial selections interactively, directly on the chart

Instant visual feedback Changing parameters during animation:

invaluable for DFA

Alarm Systems: Data Quality

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Alarm System triggers an action whenever problem is found: creates record in the log sends e-mail stops processing runs additional tests

Alarm Systems: Algorithms Applicability

13

Actuarial assumptions testing Mack Murphy Zehnwirth

Alarm Systems: Digital Dashboard

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Portal to the most important info Corporate Professional Personal

Dashboard’s space limitations re-emphasize the necessity of space-conscious reporting techniques!

Conclusion

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For effective use of computerized reporting tools available to actuaries, it is imperative to define measurable indicators of actuarial significance…

Conclusion

15

“The gods help them that help themselves.”

Aesop

Me.About

Actuarially related activities:• Prize for the best article in the “Data Management discussion paper”

call (1997).• Creation and distribution of actuarial software

• Triangle Maker® (1994), Triangle Maker® Pro (1997), Actuarial Toolchest™ (1998) , Enabler™ (1999)

• Design, development and coding of the 2nd and 3rd (current) generation of Affinity (1996)

• Promotion of notions like Ideal Actuarial System and Data Quality Shield, and paradigms like object-oriented actuarial software and data-driven visualization.Presently developing an integrated pricing/reserving/DFA computer system for reinsurance and also an action/adventure computer game tentatively called “Actuarial Judgement”. An active member of several scientific societies and an author of almost 20 scientific publications. end