Highway Motor Policies at Lloyd s

Transcription

1 at Lloyd s My name is Stephen Dunn and I am the Syndicate Statistician for Highway Motor Policies at Lloyd s. Highway is capitalised through the Lloyd s insurance market in London and is managed by the Ockham Holdings group. We write around 200m - DM600m - $350m - business per year largely of UK motor insurance risks. This makes us a medium sized organisation in the UK motor insurance market - around the 9th or 10th biggest insurer. We like to think of ourselves as the premier non-standard motor insurer in the UK. We have around 650 employees in 8 offices. Most of those people are involved in day to day transaction processing using the policy administration system provided by the Canadian insurance software specialists Certis running on Digital VAX machines under OpenVMS. A few of those people, including me, are concerned with the analysis and presentation of underwriting results. 5/7/98 1

2 Problems and solutions in using SAS as an Underwriting Information System - Extending SAS/EIS Capabilities I am going to tell you about the development of our underwriting information system written within the SAS System. We believe that the access to information of the key decision makers within our organisation is one of the sources of our competitive advantage - SAS/EIS and SAS/AF were our chosen tools to achieve this. Our first SAS based system was an underwriting tool because it was considered the key area of deficiency of our older systems. SAS software has become central to our ratemaking process and to our reporting procedures. 5/7/98 2

3 What is the the key information analysis problem in personal lines insurance? We know too much! A typical UK insurer will carry over 100 items of information about a motor insurance risk. The majority of these will have some bearing on the relative likelihood of claim and may have some effect on the premium rate charged. 5/7/98 3

4 Private Motor Insurance Product Lines 20 Types of Cover x 3 =60 Vehicle Groups x 20 = 1200 Rating Areas x 14 = Age of Driver Bands x 8 = It will not be immediately obvious what on earth whether you have two or more children or have a red rather than a white car has to do with what you should pay for motor insurance. However there is a correlation between the likelihood of accident and each of those things. The problem for an information system is to be able to provide access to any of those 100 odd variables. 5/7/98 4

5 Private Motor Insurance Sex x 2 = Number of Claim Free Years x 9 = 2.4m Age of Vehicle x 10 = 24m Vehicle Value Bands x 10 = 242m Driver Restriction Levels x 4 =970m We want not only to look at 1-dimensional summaries of our data but 2, 3 and 4 way tables. 5/7/98 5

6 Private Motor Insurance Agents x 5000 = 4800 billion The number of cross combinations of category levels is huge. Generally we do not want to go many levels deep into the data but we do want the freedom to do any one way and two way tables of choice; most three way tables; a few four way tables etc. 5/7/98 6

7 What must an insurance information system do for us? A client/server solution Arbitrary drill down routes through data Exports to Excel Validated data feeds Fast response times We had a fairly typical list of requirements from users. We decided on a client/server approach largely because we do not really have a mainframe user environment outside the control of our policy administration systemand our users are used to the PC environment. Going client/server is at least a medium risk strategy. My advice, having done so, is if in doubt don t!! 5/7/98 7

8 SAS/EIS won t do it: Not an efficient client/server solution Hierarchies - don t allow arbitrary drill downs No automatic exports to Excel Very slow against large datasets When we started the project using SAS version 6.10 for the PC in 1995 there were severe difficulties in using SAS/EIS software on datasets of any size over a client/server link. The biggest barrier was however the constraints imposed by the limited functionality of SAS/EIS reporting objects - times have changed since then! Nothing with the facilities of the multidimensional viewer existed within the SAS/EIS object library then. Even now the insistence on the use of hierarchies in SAS/EIS causes problems - a motor insurance product does not have an intuitive hierachy attached to it and so something that requires one is unlikely to be useful. Our site uses NT workstations connected to an elderly VAX 4000 machine over lines running at 256kbps. Any client/server solution must minimize the network traffic to be feasible. There are still unresolved problems in getting SAS/EIS to do this efficiently. 5/7/98 8

9 Or will it? The SAS UK Client/server Objects The BUPA Object - Nigel Law The TABGRAPH Object - Ian Sutton And then... The FUTRIX System - Pioneer Software The SAS Institute in the UK developed some business reporting objects orginally for BUPA - the largest private medical insurer in the UK. These have been widely taken up in the UK insurance market as they suit the needs of this kind of business very well. 5/7/98 9

10 How do they help? Arbitrary drill downs True client/server solution Export to Excel, Lotus 1-2-3, Word Link applications But... Unsupported software Bugs!!!! It s still slow They give an insurance organistaion just what it wants in being able to create any two way table of data for any defined row and any column dimension within almost any definable where clause. For example we can produce a table of loss ratios showing age of driver down one side of the screen, age of vehicle along the top for our motorcycle account for riders in Northern Ireland who have 2 claim free years. These objects do not have the same level of support as standard SAS/EIS objects do and have slowly worked through initial reliability problems. 5/7/98 10

11 The System Admin System Flat database extracts Base SAS on VMS SAS/AF PC Application SAS/EIS TABGRAPH objects SAS/AF, Base SAS Fixed reports The underwriting information system incorporates these objects within a SAS/AF front end running on NT workstations. The system also uses other elements of the SAS system to do simple, fixed, rerunnable reports by using the SAS/AF frame to create and to run remote batch files on the server and then presenting the results to the user from a downloaded output catalog. 5/7/98 11

12 Our EIS front end uses images as push buttons - a very easy thing to do with SAS/EIS. 5/7/98 12

13 The main screen allows the user to select from enterprise wide public EIS objects or fixed format reports or from their own library of personal reports and EIS objects. 5/7/98 13

14 The main screen of the TABGRAPH object has everything you need to create the arbitrary tabulations mentioned earlier. Its option menus allows exports to Excel, Word or Lotus and the saving of drill down positions so that you can come back to an anlysis of interest on another day or on next month s updated data. It has many other facilities including the ability to switch back and forth between tabular and graphical representations; the ability to run against SAS datasets or RDBMS files using SAS/ACCESS; the ability to pick up the where clause and apply it to another EIS object pointing at a different dataset. 5/7/98 14

15 The fixed reports I mentioned earlier work fairly simply. A list of catalog entries is displayed to the user who can either choose to view the the output entry of that name or to rerun the job which created the output entry. This is done by writing a mainframe batch file to an area which an OpenVMS daemon looks at regularly to submit code from. 5/7/98 15

16 The results are simple prints but reasonably effective and extremely effective because any adhoc reporting enquiry no matter how odd can be made available to any user to rerun at his/her discretion. 5/7/98 16

17 Can we make it better? Can we make it faster? What about the data items we can t see in the analysis and drill down lists? There will always be complaints about machine response times. These are particulary irksome when there are significant delays every time you touch a key to drill down in an EIS system - unavoidable if you have to read 3 million records to produce a list of driver ages for example. The user community will always want you to expand the scope of what you do for them already. Can we add this or that extra class variable? Can we break age bands out into the individual ages? Can we have extra analysis variables? 5/7/98 17

18 We can change the functionality of the TABGRAPH objects We have the source code One of the things that made me uneasy about the standard SAS/EIS objects is that you can t change what they do very easily. System designers are the last people who should be allowed to design systems - they are too far from the real business environment to be sensitive too real pressures. A great advantage of the TABGRAPH object was that it comes with source code so you can change what it does. You can add interfaces to SAS/Insight, SAS/Stats, SAS/GIS etc. 5/7/98 18

19 We can make use of features of SAS/AF - SAS/EIS The functionality of SAS/EIS objects is defined by SAS data structures SAS/EIS objects are defined and controlled by SAS code and SAS data structures. 5/7/98 19

20 Understanding A SAS/ EIS application structure SAS/EIS DATA REGISTRATION The SAS Metabase APPLICATION REGISTRATION The Application Data A SAS/EIS application consists of two elements - the data registered with the SAS metabase and the application data created by the application s build program. 5/7/98 20

21 Understanding A SAS/ EIS application structure SAS/EIS DATA REGISTRATION The SAS Metabase APPLICATION REGISTRATION The Application Data Variable Registration Dataset Variables Hierachies Class variables Application Dataset Name,type,Location Run program Build program Application List *.*.*.EIS All parameters In the SAS metabase you give variables extra attributes such as defining then to be CLASS or ANALYSIS variables and you can define dataset attributes such as associated hierarchies. For any SAS/EIS application, the application dataset defines the program that will be run when the application is built; the program which runs at execution time and the location of the application list. It is very largely this list which contains all the information the object needs at execution time. 5/7/98 21

22 So what did we do? We invented a multidimensional database We invented a query optimization algorithm to use it We invented a dynamic EIS registration system We invented a primitive version of the SAS multi-dimensional database - the SAS one did not exist at the time. I am at least the third person I know to have done something like this - demonstrating the market need for such a product. Since we had the source code for the objects we could change their functionality to take advantage of these data structures. 5/7/98 22

23 How does the multidimensional database work? Generate code like: PROC SUMMARY DATA=POLICY; BY year; CLASS age area group; VAR premium claims; OUTPUT OUT=TEMP SUM=; RUN; SAS/Base has always had the ability to create multi-way summaries. That is what PROC SUMMARY does unless you stop it from doing so with the nway option. 5/7/98 23

24 How does the multidimensional database work? and then use the values of _TYPE_: DATA SUMM0(KEEP = year premium claims WHERE=(_TYPE_=0)) SUMM1(KEEP = year premium claims group WHERE=(_TYPE_=1)) SUMM2 etc We simply create lots of small summary datasets from PROC SUMMARY output - one for each value of _TYPE_ (see SAS Procedures Guide for details of this variable). 5/7/98 24

25 How does the multidimensional database work? POLICY Master dataset SUMM0 claims premium year SUMM1 claims premium year SUMM2 claims premium year SUMM3 claims premium year SUMM4 claims premium year SUMM5 claims premium year SUMM6 claims premium year SUMM7 claims premium year group area area group age age group age area age area group These various summary datasets contain only the analysis variables and those class variables which are not summarized for that value of _TYPE_. A summary dataset may for example contain analysis variables premiums and claims and class variables year and driver age. Each observation would then represent the summary for the analysis variables over all other class variables for the given driver age and year. 5/7/98 25

26 The multidimensional database consists of The master dataset - POLICY The summary files SUMM0-SUMMn A meta dataset - containing the list of dataset names Our multidimensional database consists of the master dataset, the summary datasets and a list connecting the them. 5/7/98 26

27 How does the query optimization work? At build time: Enter the name of the metadata list. At run time: At initialization compile a list of the columns in each dataset in the list and the size of each dataset Within the TABGRAPH object we associate the list of summary datasets with the application. At run time we compile lists of the columns in each dataset. 5/7/98 27

28 How does the query optimization work? For every call to the summarization sub- routine : Create a list of required analysis variables Create a list of required class variables Create a list of required subsetting variables Every time the program needs to summarize the master dataset it compiles a list of the columns it needs to have access to. 5/7/98 28

29 How does the query optimization work? For every call to the summarization sub- routine : Choose the smallest dataset which contains all the required columns Use this selected dataset as the source data for the query Then the program chooses the smallest table on its list which has all the necessary columns in it. 5/7/98 29

30 How does the query optimization work? In order to achieve this we need to Edit the build frame SCL Amend the structure of the EIS application list Edit the run frame SCL To achieve this we have to amend the build program, the run program and the structure of the application list itself. 5/7/98 30

31 What does all this achieve? Fast response times against on a slow machine A degree of scalability Happier customers Doing all this provides significant benefits in response times - often the difference between running against 100 records or 3 million. 5/7/98 31

32 Can we make it better? Can we make it faster? What about the data items we can t see in the analysis and drill down lists? Having achieved this we extended the scope of the system to make it more general. 5/7/98 32

33 We can make use of features of SAS/AF - SAS/EIS The functionality of SAS/EIS objects is defined by SAS data structures Since we are familiar with the TABGRAPH object structures we created a SAS/AF application to create them directly without the need to use the build frame or the SAS metabase dialogues. 5/7/98 33

34 In fact we register data before it actually exists. 5/7/98 34

35 What did we do? Selected an input data set Run a remote batch PROC SUMMARY Used SAS Metabase Methods to register data Added an interface to the desktop to run a SAS/EIS application Written out SAS/EIS application lists and data In a fairly simple way the SAS/AF application bundles together all the stages of the process. It selects an input data, defines a PROC SUMMARY against it, uses SAS/EIS metabase methods to register the data, adds an interface to the desktop and creates a TABGRAPH application list and data. Then it runs the PROC SUMMARY as a remote batch on the server - all from one fill-inthe-blanks SAS/AF frame. 5/7/98 35

36 That s All Folks Any questions? 5/7/98 36