Overview

The Basis Reference Technique (BRT) introduced in the AXIS actuarial modelling system represents a significant evolution in defining and managing actuarial assumptions and product features used for calculations within an AXIS dataset. AXIS version 2021.04.00 (March 2021) marks the first release of this powerful new capacity under Beta feature control. In AXIS version 2023.24.00, the BRT was further extended to the Product Features sections in the Main Cell screen. In a recent AXIS release 2024.24.00, the BRT was removed from the Beta testing phase.

The BRT introduces a structural change in AXIS that improves the ability to define, manage, control, review and report larger and more granular sets of actuarial assumptions used in production models. The technique will be especially useful for efficiently managing large sets of actuarial assumptions used for the valuation frameworks that are subject to frequent update (e.g. IFRS 17, US GAAP LDTI, VM-20 and PBA).

The central feature of the BRT is that the definition of assumptions for any given Actuarial Assumption Set and Product Features Section is extracted from the Cells/seriatim records and is consolidated in a new Basis Reference Rules Database object in AXIS. This Rules Database provides a generic rules-based approach to defining actuarial assumptions and product features according to model "segment" (i.e. any portion of the model sharing attributes such as product line, plan, features, era, and risk class characteristics of the insured which in turn determine the actuarial assumptions). These rules can then be applied consistently across multiple AXIS applications regardless of model structure or Cell naming. This Rules Database also becomes an accessible, archivable, and authoritative specification of the actuarial assumption basis and product features being used for each purpose at any given point in time.

Anticipated Benefits of Using Basis Reference Technique

The BRT is expected to have many benefits, including:

• Improved model transparency in terms of actuarial assumptions and product features being used
• Assured consistency in assumptions used by AXIS for different applications
• Convenient documentation of actuarial assumptions used currently and historically through accessible databases
• Simpler and quicker processes for defining and implementing assumption updates within an AXIS model
• Enabled simplified model rebuilds without having to update all product features and Assumption Sets in Cells