Work with Actuarial Models in Prophet (Beginner)

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Work with Actuarial Models in Prophet” course serves as an introductory module within the “Prophet for Actuarial” series, designed to elucidate the foundational principles of actuarial model construction within Prophet. The course aims to equip participants with the necessary skills to efficiently utilize Prophet for actuarial computations pertaining to the existing portfolio of a company, as well as for the projection of new business in the context of annual budgeting exercises.

Structured using a modular, “building-block” methodology, the course commences by introducing the essential elements of Prophet required for executing calculation runs and for the subsequent retrieval and analysis of results through various methodologies. Additionally, participants will acquire knowledge on how to configure a new product within the Prophet environment, encompassing adjustments to formulae within input variables and the creation or modification of tables.

Emphasizing a problem-solving approach, the course intends to impart techniques that are immediately applicable and beneficial to the participants’ routine professional tasks. The challenges and exercises presented throughout the course are inspired by genuine actuarial tasks encountered within the insurance sector, thereby ensuring the relevance and practical applicability of the skills acquired.

Course Level: Beginner
Target Audience: New actuarial entries / Junior & senior actuarial executives (1-3 years of experience) / Actuarial valuation team

Course Outlines

Chapter 1: What is Prophet?
This chapter provides an in-depth guide on the fundamental elements of a Prophet workspace, encompassing libraries, products, run structures, run settings, tables, and Model Point files. Participants will gain a comprehensive understanding of the features and functionalities of each of these critical components.

Chapter 2: Perform Runs for In Force Business
This chapter delves into the methodologies for executing calculations within Prophet, specifically targeting in-force business operations. It outlines the process for establishing necessary run structures and settings to facilitate these calculations. Participants will learn to interpret the outcomes of Prophet runs by utilizing the diagram view for result analysis and mastering the navigation through preceding and dependent variables.

A common practice in IFRS17 implementations involving Prophet is the generation of “RPT files” or individual Model Point result files. This section will guide participants through the creation of variable groups for RPT file production and strategies to optimize calculation runs, thereby enhancing efficiency and reducing redundancy.

Chapter 3: Extract Results Using Excel & Query
Prophet users frequently prefer analyzing results in spreadsheet applications, like Excel, over direct interaction with Prophet. This chapter imparts techniques for extracting results into Excel, including the development of an organized result extraction template. Additionally, it introduces the query technique as an alternative method for extracting specific result ranges directly from Prophet, offering valuable insights for result verification and comparison.

Chapter 4: Perform Runs for New Business
This chapter introduces methodologies for forecasting new business cash flows, a process commonly referred to as “new business processing.” It covers two prevalent techniques in the conventional and takaful industries: the cross multiplication method and the project method.

Participants will also learn to validate the results produced by Prophet against the new business volume outlined in the sales file. This validation process sheds light on the internal workings of actuarial models within Prophet, moving beyond a superficial understanding of these models as mere “black boxes.”

Additionally, the chapter presents a technique for aggregating run results from selected products, known as accumulations.

Chapter 5: Create New Products in the Workspace
This chapter provides a comprehensive guide on setting up new products in the Prophet workspace, including the creation of master products and same as products. Participants will be instructed on how to create or modify various tables (such as parameter tables, generic tables, and mortality tables), with a focus on adjusting assumptions to reflect changes in product features like premium rates and sum assured. This involves altering the default formulas in the input variables.

To conclude the course, participants will be introduced to methods for backing up and restoring the Prophet workspace, as well as implementing user controls, ensuring a thorough grasp of both the technical and administrative aspects of working with Prophet.

NOTES: All decorative imagery featured in this course has been created with the DALL-E artificial intelligence tool, except where explicitly noted otherwise.