Modeling Variable Annuity products requires sophisticated software that accurately reflects product features, policyholder behaviour and risk mitigation strategies using stochastic analysis. AXIS offers a single convergent solution for all actuarial applications that assures consistency in business models and actuarial calculations between applications while optimizing flexibility, performance and control. And now AXIS also offers integrated simulation of hedge strategies.

Under traditional approaches to Actuarial Software, multiple applications are developed independently to handle diverse actuarial applications, resulting in a proliferation of diverse models, running on different platforms, and requiring redundant definitions of products, actuarial assumptions, and reserve and capital calculations. Those applications supporting advanced asset/liability interaction or stochastic analysis often place limits on model size forcing compression and loss of detail, and demanding huge investment in IT resources. Actuaries waste time supporting and validating multiple systems and inforce models, and explaining discrepancies or inconsistent results.

AXIS offers a sensible alternative to this multiple models mess. One installed application has the full functionality set needed to support all types of actuarial applications related to Variable Annuities (and many other products) consistently and efficiently. This offers amazing advantages:

• New product features or product repricing can be quickly and efficiently completed, based on a detailed analysis of risks and resulting cash flows and accounting results. Model components developed for pricing can be reused for corporate applications including valuation, capital analysis, and financial projections, thus saving time and effort, assuring consistency of treatment and analysis.
• The impact of proposed Hedging Strategies can be studied on a stochastic basis to support pricing and risk management, and identical strategies can then be incorporated in valuation and financial projection applications.
• The use of a single modelling application, combined with the vendor maintained structure of the AXIS system framework, and the fully object oriented user defined models, greatly facilitates model control and satisfaction of audit requirements.
• The full precision of detailed modeling of all risks can be retained for all purposes, thus assuring consistency and usefulness of results compared to special purpose models that may force simplified model elements or risk factors.
• When model compression is needed to meet run-time and resource constraints, AXIS facilitates the validation and analysis of compression decisions since it can run either full seriatim or compressed. The power and performance of AXIS reduces the amount of compression needed, and minimizes inconsistency forced by the use of fewer model points.

For further information on the amazing versatility of AXIS, contact us directly.