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The Games We Play: the Future of DFA Models’ Interfaces
Aleksey Popelyukhin, Ph.D.Vice President, Information Systems & Technology
2 WINGS RISK SERVICES
Dynamic Financial Analysis
Studies the company as a whole Takes into account multiple types of risk Compares results of different strategies Generates distribution of possible outcomes
but1
Dynamic Financial Analysis
is it really Dynamic
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?
Now that you have your distribution
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800
815
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845
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questions arise
How did I get there?
staying profitable being not so profitable making all sorts of mistakes
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time
Why didn’t I react?
at that point in time at that point in time at that point in time
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time
What could I do?
how to avoid getting into “red zone” what levers do I have which scenarios require actions
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time
Non-dynamic DFA
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Doesn’t allow analysis of particular scenarios or group of scenarios
Doesn’t allow time-variant strategies Doesn’t’ allow scenario-dependent strategies
In short,All decisions has to be made before simulations.
DFA can be enhanced
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If one adds:
Ability to run particular scenario (s) Higher level of details Clearly identified “levers” Time animation Ability to define strategy “on-the-fly”
(as a response to scenario behavior)
Should we start from scratch?
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We need a computing environment that provides:
High level of details Time animation Interactivity
Welcome to the world of Games!
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Simulation Games
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Provide a computing environment with:
High level of details Time animation Interactivity
Similarity is striking!
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Empire/City/Railroad Building game vs.
Insurance Company management simulation:
Visual Metaphor Functional Metaphor “Gameplay”
Visual Metaphor
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Zoning Areas Bulldozing Cost Tall Buildings Cultural Influence Natural Disasters
(fires, earthquakes) etc.
Lines of Business Brokerage Fees Large Losses A.M. Best Rating Natural Disasters
(fires, earthquakes) …
Functional Metaphor
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Emperor/Mayor Advisors Progress Monitoring Orders Taxes etc.
Decision Maker CFO/Actuaries/Claims Reporting Actions Taxes …
“Gameplay”
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Watch Critical Indicators Check Advisors Reports Make Decisions Intervene Observe Effect in “real” time repeat
Benefits
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“Game-like” computing environment serves as:
Training ground for Executives Fine-Tuning tool for Strategists Self-Learning program for AI Monitoring paradise for Management Modeling Sandbox for Actuaries
Training
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Thinking with Images Making Decisions without any Damage Behavior in case of Disaster
Fine-Tuning
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Choosing Success Criteria Refining Strategies Definitions (if..then) Business Processes Assumption Testing
Monitoring
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Multiple factors at once “Real” time Visual cues
Dynamic Response
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Time is visualized Non-linear strategies Feedback
Reserves Prices Investment
Implementation
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Starting with the existing game Engine
we will get: Rich Interactive Interface Flexible Modeling Environment
we will not get: Industry specific Models Ability to import and constantly update Data
Engine Modifications
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Simulate Economy Simulate Company Simulate Correlations Simulate the rest:
Competition Geography Weather Catastrophes
Monitoring
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Even if we were able to: Design new Models Collect necessary Data Implement all Algorithms
We still have to decide: Which statistics to calculate Which indicators to monitor Which criteria to use for alerts
Presentation of Analysis Results to the Management of the Company
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built-in!
Conclusion
end
Inevitably, DFA interfaces will resemble modern simulation game environments.
Everyone will benefit: Actuaries Management Shareholders Policyholders
Real-life examples
P.S.
1. Spatial visualization:
Real-life examples
P.S.
2. Time animation:
Real-life examples
P.S.
3. First Actuarial Game:
