Experience Analysis

A potential secondary application of the Earnings by Source functionality in AXIS is the development of experience analysis studies. Provided that actual policy movement transactions are being captured in DataLink and linked to inforce policies, AXIS will be able to generate seriatim output that include census information at the beginning of the study, at the start of each calendar year and the start of each duration, as well as the expected and actual decrements, all broken down by age, duration and calendar year.

When Fund based EBS analysis is involved (UL and Annuity modules), you will also be capturing actual Fund Movement Transactions, such as premiums and partial withdrawals by Policy ID. You can also analyze this experience on an actual to expected basis.

The seriatim output will allow analysis of actual vs. expected experience as well as actual rate calculation studies. These studies can be easily constructed by querying the output, allowing analysis by calendar year and/or duration. The duration for disabled lives is the claim duration as defined in the cells, while all other studies use annual policy duration. The output can be stored in a database and combined with multiple studies to build up larger volumes of statistics to allow more detailed analysis and the study of trends.

The actual movements analyzed include movements by death, lapse and other benefit causes in the life insurance modules, and incidence, (cause 1 and cause 2), DI death, recovery as well as lapse and other benefit terminations in the Disability module. While AXIS does not explicitly support any further subdivision of these causes, you may record additional details by cause in the DataLink Policy Movement Transaction Table, which can be used in the queries used to prepare analysis reports.

Similarly, the Policy Information Table used to feed the inforce and new business seriatim records to AXIS can contain any additional policy and insured risk descriptive fields that are available from your administration systems, which can then be used in queries to develop experience analysis by policy duration, issue age, agency system or location, underwriting category, geographic area or other similar breakdown.

Typically the first stage in an analysis will be to summarize actual, expected or inforce data into summary categories covering a range of financial periods, policy durations, issue or attained ages, and plan codes. Summarization will be necessary so that calculated ratios are based on sufficient volumes of records to produce useful or credible results at each subcategory presented. Archiving current period actual and expected movements and census information in seriatim detail and combining with future years data will build up larger volumes of statistics that will allow more flexibility in the levels of detail built in to the reports. Results produced by summarization queries can be stored in additional tables, and second stage queries can then be used to create the final analysis by the breakdowns selected in the summaries. These second stage queries can use the first stage queries as a direct source, instead of the stored results (query on query) although the execution time on a stored table is obviously faster.

The experience study functionality is accessed through selecting the appropriate report pack in a Calendar year projection recalculation batch process. Within the report pack the expected basis can be set to any one of the Pricing, Statutory unMADded, Statutory MADded,  Second, Third, Forth or Fifth reserve bases.

Contact GGY for a demonstration of how the experience study functionality works and for assistance in designing experience studies to support different objectives.