32  Actuarial Assumptions Tables

This chapter provides information about Insurance Actuarial Policy Summary, Mortality and Morbidity tables, and several Insurance Lapse Rate Assumptions Result tables in the Oracle Insurance Data Foundation Application.

Topics:

·        Actuarial Assumptions Dimension Tables

·        Financial Assumptions Tables

·        Demographic Assumptions Tables 

·        Deploying Actuarial Assumptions Tables on Hive

·        Populating Actuarial Assumptions Dimension Tables

·        Populating Actuarial Assumptions T2T Result Tables

·        Related Topics

An actuarial assumption is an estimate of an uncertain variable input into a financial model, normally for the purposes of calculating premiums or benefits.

Actuarial Assumptions Dimension Tables

Actuarial Assumption Dimension table names and their description are given here.

Table 303: Actuarial Assumption Dimension table names and their description

Logical Dimension Table Name

Dimension Table Description

Actuarial Assumption Dimension

This table stores the name of the set of Actuarial Assumptions used for valuations. While the Actuarial valuation code can remain the same, parameters for the same can change for different valuation dates.

Premium Rate Dimension

This table stores the details of the Premium rate. Premium tables provide premium rates for a given premium basis amount.

 

The mapping details for the Actuarial Assumption Dimension tables are given here.

Table 304: The mapping details for the Actuarial Assumption Dimension tables

Map Reference Number

Source Table Name

Logical Stage Table Name

Dimension Table Name

Logical Dimension Table Name

683

STG_ACTUARIAL_ASSUMPTN_MASTER

Stage Actuarial Assumption Master

DIM_ACTUARIAL_ASSUMPTN

Actuarial Assumption Dimension

733

STG_PREMIUM_RATE_TABLE_MASTER

Stage Premium Rate Master

DIM_PREMIUM_RATE_TABLE

Premium Rate Dimension

 

There are two types of Insurance Actuarial Assumptions tables:

·        Financial Assumptions Tables

·        Demographic Assumptions Tables 

Financial Assumptions Tables

Financial assumptions evaluate the projected benefits of the Party or organization in a certain plan. These financial assumptions include assumptions about interest rates, and lapse rate assumptions.

·        Insurance Lapse Rate Assumptions

Insurance Lapse Rate is the rate at which insurance policy terminates because of the failure in premium payment by the policyholder. The Insurance Lapse Rate Assumptions table stores the insurance lapse rates to be used for assessment of insurance policies. The lapse rate group code binds multiple lapse rates under one heading.

The purpose of the Insurance Lapse Rate Assumptions table is that the Insurers can set premiums which results in high or low-priced products.

·        Interest Rate Curve (IRC)

Interest Rate Curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates.

Financial Assumptions include Insurance Lapse Rate Assumptions and Interest Rate Curve (IRC).

Topics:

·        Interest Rate Curve Dimension Table

·        Insurance Lapse Rate Assumptions Table

·        Insurance Cost of Living Adjustments Table 

·        Premium Rate Tables

Interest Rate Curve Tables

About Interest Rate Curve Dimension Table

Interest Rate Curve Dimension table name and its description are given here.

Table 305: Interest Rate Curve Dimension table name and its description

Logical Dimension Table Name

Dimension Table Description

Interest Rate Curve Dimension

This table stores the interest rate curve definitions.

 

The mapping details for the Interest Rate Curve Dimension table are given here.

Table 306: The mapping details for the Interest Rate Curve Dimension table

Map Reference Number

Source Table Name

Logical Stage Table Name

Dimension Table Name

Logical Dimension Table Name

246

STG_IRCS

Stage Interest Rate Curve

DIM_IRC

Interest Rate Curve Dimension

 

Insurance Lapse Rate Assumptions Table

About Insurance Lapse Rate Assumptions T2T (Result Table)

Insurance Lapse Rate Assumptions T2T and its description is given here.

Table 307: Insurance Lapse Rate Assumptions T2T and its description

T2T name

T2T Description

T2T_FCT_LAPSE_RATE_ASSUMPTIONS

This T2T stores the insurance lapse rates, which is used for the valuation of insurance policies. This T2T stores the lapse rate group code that binds multiple lapse rates under one heading.

 

The mapping details for the Insurance Lapse Rate Assumptions T2T is given here.

Table 308: The mapping details for the Insurance Lapse Rate Assumptions T2T

Source Table Name

Logical Stage Table Name

Fact Table Name

Logical Fact Table Name

T2T Name

STG_INSURANCE_LAPSE_R ATES

Stage Insurance Lapse Rates

FCT_LAPSE_RATE_ASSUMPTIONS

Fact Lapse Rate Assumptions

T2T_FCT_LAPSE_RATE_ASSUMPTIONS

 

Insurance Cost of Living Adjustment Tables

The Insurance Cost of Living Adjustment Dimension table is used to determine the retirement, annuity, or other similar benefits. The methodology identifies a benchmark and based on benchmark movements, adjustment of living costs are published either by the government agency or the insurer.

About Insurance Cost of Living Adjustment Dimension Table

Insurance Cost of Living Adjustment Dimension table name and its description is given here.

Table 309: Insurance Cost of Living Adjustment Dimension table name and its description

Logical Dimension Table Name

Dimension Table Description

Cost of Living Adjustment Dimension

This table stores the code and benchmark details for the Cost of Living Adjustments definition.

 

The mapping details for the Insurance Cost of Living Adjustment Dimension table is given here.

Table 310: The mapping details for the Insurance Cost of Living Adjustment Dimension table

Map Reference Number

Source Table Name

Logical Stage Table Name

Dimension Table Name

Logical Dimension Table Name

682

STG_COLA_ADJUSTMENT_MASTER

Stage Cost of Living Adjustment Master

DIM_COLA_ADJUSTMENT

Cost of Living Adjustment Dimension

 

About Insurance Cost of Living Adjustment T2T (Result Table)

Insurance Cost of Living Adjustment T2T and its description is given here.

Table 311: Insurance Cost of Living Adjustment T2T and its description

T2T name

T2T Description

T2T_FCT_COLA_ADJUSTMENT_SCHEDULE

This T2T stores the Cost of Living Adjustments for a given COLA definition and year of adjustment details. They are used to determine the retirement, annuity, or similar other benefits.

 

The mapping details for the Insurance Cost of Living Adjustment T2T is given here.

Table 312: The mapping details for the Insurance Cost of Living Adjustment T2T

Source Table Name

Logical Stage Table Name

Fact Table Name

Logical Fact Table Name

T2T Name

STG_COLA_ADJUSTMENT_SCHEDULE

Stage Cost of Living Adjustment Schedule

FCT_COLA_ADJUSTMENT_SCHEDULE

Fact Cost of Living Adjustment Schedule

T2T_FCT_COLA_ADJUSTMENT_SCHEDULE

 

Premium Rate Tables

When a person applies for a Life Insurance policy, their insurance company examines the results of their physical examination, their family health history, and lifestyle to determine if they fit into one of their standard categories or classifications.

For example, different types of categories are:

·        Preferred Select: This classification usually refers to very healthy. In order to qualify for this level, you need to have a normal weight and height as well as no family factors that could lead to an early death. This category enjoys the lowest premiums and may also be called Preferred Elite or Preferred Plus.

·        Standard Plus: These applicants are still in great health but a medical or lifestyle factor prevents them from qualifying for a Preferred Select. Being overweight, having high blood pressure or cholesterol issues could be the culprit.

·        Standard: This is for everyone who is average when it comes to health. They have a normal life expectancy and could have weight issues or a parent that died early.

·        Preferred Smoker: If you are a smoker who would normally fall into the preferred select category, this is where you will fall. Smokers will always pay more for life insurance so be prepared for a higher premium.

·        Standard Smoker: A smoker who would fall into the standard category if they didn't smoke will be placed in this category.

When the Life Insurance applicant does not fit into one of the standard rating categories due to a health issue, risky occupation, or an adventurous lifestyle (think skydivers, rock climbers, and so on), they may end up with a table rating. Such records are categorized and stored in Premium Rate tables.

For information on how the risk factors affect the Insurance Underwriting of a Life Insurance applicant, see Insurance Underwriting Tables for Risk Analysis.

About Premium Rate Dimension Table

Premium Rate Dimension table name and its description are given here.

Table 313: Premium Rate Dimension table name and its description

Logical Dimension Table Name

Dimension Table Description

Premium Rate Dimension

This table stores the details of the Premium rate. Premium tables provide premium rates for a given premium basis amount.

 

The mapping details for the Premium Rate Dimension table is given here.

Table 314: The mapping details for the Premium Rate Dimension table

Map Reference Number

Source Table Name

Logical Stage Table Name

Dimension Table Name

Logical Dimension Table Name

733

STG_PREMIUM_RATE_TABLE_MASTER

Stage Premium Rate Master

DIM_PREMIUM_RATE_TABLE

Premium Rate Dimension

 

About Premium Rate T2T (Result Table)

Premium Rate T2T name and its description are given here.

Table 315: Premium Rate T2T name and its description

T2T Name

T2T Description

T2T_FCT_PREMIUM_RATE_TABLE_DTLS

This T2T stores the Premium Rate table details.

 

The mapping details for the Premium Rate T2T is given here.

Table 316: The mapping details for the Premium Rate T2T

Source Table Name

Logical Stage Table Name

Fact Table Name

Logical Fact Table Name

T2T Name

STG_PREMIUM_RATE_TABLE_DTLS

Stage Premium Rate Table Details

FCT_PREMIUM_RATE_TABLE_DTLS

Fact Premium Rate Table Details

T2T_FCT_PREMIUM_RATE_TABLE_DTLS

 

Demographic Assumptions Tables

Demographic assumptions evaluate the projected benefits of all the parties or organizations in a certain plan. These demographic assumptions include assumptions about mortality, disability, termination of employment, and retirement.

Demographic Assumptions includes:

·        Insurance Mortality

The Insurance Mortality is the amount charged by the Insurer for delivering the guaranteed Sum Assured on premature death of the policyholder.

The purpose of the Insurance Mortality table is to store the sum charged every year by the Insurer to the policyholder to deliver the life cover.

·        Insurance for Morbidity

Morbidity on insurance terms is the insurance coverage provided by the insurer to the policyholder for the specified illness of the policyholder.

Topic:

·        Insurance Mortality and Morbidity Tables

Insurance Mortality and Morbidity Tables

About Insurance Mortality and Morbidity Dimension Tables

Insurance Mortality and Morbidity Dimension table names and their description are given here.

Table 317: Insurance Mortality and Morbidity Dimension table names and their description

Logical Dimension Table Name

Dimension Table Description

Insurance Morbidity Dimension

This table stores the morbidity rates. It is a statistical table used by actuaries in determining the incidence of illnesses and accidents and the longevity of the disability resulting therefrom. This is used in computing policy premiums and reserves.

Insurance Mortality Dimension

This table stores the mortality table required for insurance carriers. A 'Mortality Table' is the one that shows the rate of deaths occurring in a defined population during a selected time interval, or survival from birth to any given age. Statistics included in the mortality table show the probability of a person's death before their next birthday based on their age. Also known as the periodic table, this is based on the mortality experience of a population during a relatively short period of time.

Insurance Mortality Multiplier Dimension

This table stores the mortality multipliers’ names. Multipliers are generally calculated to reflect a more accurate estimation of mortality depending on growth in population and given rate of return.

 

The mapping details for the Insurance Mortality and Morbidity Dimension tables are given here.

Table 318: The mapping details for the Insurance Mortality and Morbidity Dimension tables

Map Reference Number

Source Table Name

Logical Stage Table Name

Dimension Table Name

Logical Dimension Table Name

424

STG_INS_MORBIDITY_MASTER

Stage Insurance Morbidity Master

DIM_INS_MORBIDITY

Insurance Morbidity Dimension

425

STG_INS_MORTALITY_MASTER

Stage Insurance Mortality Master

DIM_INS_MORTALITY

Insurance Mortality Dimension

684

STG_INS_MORTALITY_MULT_MASTER

Stage Insurance Mortality Multiplier Master

DIM_INS_MORTALITY_MULTIPLIER

Insurance Mortality Multiplier Dimension

 

About Insurance Mortality and Morbidity T2Ts (Result Tables)

Insurance Mortality and Morbidity T2Ts and their description are given here.

Table 319: Insurance Mortality and Morbidity T2Ts and their description

T2T Name

T2T Description

T2T_FCT_INSURANCE_MORTALITY

This T2T stores the sum charged every year by the Insurer to the policyholder to deliver the life cover.

T2T_FCT_INSURANCE_MORBIDITY

This T2T stores details of morbidity rates, which are actual age, survival probabilities, and so on, related to particular mortality tables.

T2T_FCT_INS_MORTALITY_MULT_DTLS

This T2T stores the mortality multipliers. Multipliers are generally calculated to reflect a more accurate estimation of mortality depending on growth in population and given rate of return.

 

The mapping details for the Insurance Mortality and Morbidity T2Ts are given here.

Table 320: The mapping details for the Insurance Mortality and Morbidity T2Ts

Source Table Name

Logical Stage Table Name

Fact Table Name

Logical Fact Table Name

T2T Name

STG_INSURANCE_MORTALITY

Stage Insurance Mortality

FCT_INSURANCE_MORTALITY

Fact Insurance Mortality

T2T_FCT_INSURANCE_MORTALITY

STG_INSURANCE_MORBIDITY

Stage Insurance Morbidity

FCT_INSURANCE_MORBIDITY

Fact Insurance Morbidity

T2T_FCT_INSURANCE_MORBIDITY

STG_INS_MORTALITY_MULT_DTLS

Stage Insurance Mortality Multiplier Details

FCT_INS_MORTALITY_MULT_DTLS

Fact Insurance Mortality Multiplier Details

T2T_FCT_INS_MORTALITY_MULT_DTLS

 

Deploying Actuarial Assumptions Tables on Hive

All RDBMS related Result tables can also be deployed on Hive (Stage and Results). Deploy the Hive T2Ts using the Rules Run Framework. For more information, see the Rules Run Framework section in the Oracle Financial Services Advanced Analytical Applications Infrastructure User Guide Release 8.1.1.0.0.

 

NOTE:   

In general, Stage and Result tables are also supported in Hive. However, there are some exceptions. For a list of tables that are not supported in Hive, see List of Unsupported T2Ts

 

Populating Actuarial Assumptions Dimension Tables

Follow this SCD process to populate data into a Dimension table:

 

NOTE:   

You can also follow this SCD process to populate data into any Hive-related Dimension table.

 

1.     To populate data into a Dimension table, execute the SCD batch. For a detailed procedure, see the Slowly Changing Dimension (SCD) Process.

2.     To check the SCD batch execution status of a Dimension table, follow the procedure Check the Execution Status of the SCD Batch.

3.     To verify log files, and check the error messages (if any), follow the procedure Verify Log Files and Check Error Messages.

Populating Actuarial Assumptions T2T Result Tables

Follow this T2T process to populate data into any T2T Result table:

 

NOTE:   

Only RDBMS T2Ts can be executed using the PMF.

 

1.     To populate data into any T2T Result table, execute the PMF process for that T2T. For a detailed procedure, see the following sections:

a.     Prerequisites for loading T2T.

b.     Select the Run Parameters and Execute the Run.

2.     To check the T2T execution status and verify the log files of any Result table, follow the procedure in the Verify the Run Execution section.

3.     To check the error messages, if any, follow the procedure in the Check Error Messages section.

Related Topics

You can see the following topics related to other function-specific tables:

·        Insurance Contracts Tables