High-Performance Computing: The Power of Two Boosts Actuarial Software Performance

The demands placed on actuarial software have never been higher, thanks to a combination of the evolving regulatory environment and advances in modeling techniques. What is more, the pressure being put on organizations’ IT resources to cope with these changes will only become more intense. The solution though lies in leveraging an enterprise-level high-performance computing (HPC) architecture, says Marc Fakkel, head of operations with SunGard iWORKS.

WFS: How is the environment your clients face changing?

MF: Recent and upcoming industry changes - such as IFRS phase II for insurers, C3 Phase III and PBA in the U.S., and introduction of the Solvency II capital requirements and risk management standards in the European Union - are creating a more complex and fast-moving regulatory environment for insurers across the globe. From an IT perspective that means more focus on the controls, security and auditability of firms’ actuarial processes.

In addition, actuarial modeling techniques, notably Nested Stochastic, are becoming more complex as insurers’ risk management practices evolve. And this is putting more pressure on the scalability, performance and volume capabilities of the technology used to perform the calculations.

WFS: How can high-performance computing help?

MF: To date, actuarial platforms have typically been parallel processing set ups that rely on multiple networked desktops. But a desktop-based infrastructure is plagued by scalability, reliability, performance and control limitations.

Our vision is to provide clients with an enterprise server architecture that supports their processing in a centralized, secure and auditable environment. To this end, we are providing an enterprise-level infrastructure for the three key components of the actuarial software: firstly, managing the data input for the models; secondly, performing the computation of the models; and thirdly, managing and analyzing the data that comes out.

By leveraging HPC technology in this enterprise architecture, we are bringing far greater processing power and performance to the computational piece. In this way we are addressing users’ regulatory and model calculation needs, and doing so in a more cost efficient way since there is a more intelligent utilization of the hardware used to run those computations.

WFS: Why are you working with Microsoft in this area?

MF: Having a partner like Microsoft, which is able to commoditize the technology, is crucial in delivering a solution that meets our enterprise vision for those key components of the actuarial software.

With Windows HPC Server 2008, Microsoft has developed a high-powered grid and distributed processing environment that brings the robustness, reliability, scalability and processing power needed to handle today’s complex computational tasks, and they have made it available at an attractive cost.

In addition, we will be using Microsoft’s Team Foundation Server for version control and audit control of the software. We are also using SQL Server 2008, with its On-Line Analytical Processing (OLAP) technology, as our data warehouse to store and manage the data, and allow the actuaries to perform advanced and detailed analysis of the data produced by the models. In this way, the actuaries can better understand their business and thereby improve their risk management. And it is all in an enterprise server environment, as opposed to on a legacy desktop platform, which has been the norm for actuarial software over the last 20 years.

By utilizing the investments Microsoft have made therefore, we can focus on the technology layer where we add the most value, thereby enabling us to provide our clients with superior actuarial modeling capabilities in a more cost and time effective manner than if we developed everything ourselves. So while some of the technologies involved have been available for a while, the way SunGard is leveraging them in an actuarial software environment is cutting edge. In this regard, the ‘power of two’ produced by our relationship with Microsoft is enormous.

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