Glean for Life Insurance

Here you can find information on the following topics:

What is Glean?

Glean is an experience analysis system which has been developed by SunGard. It provides sophisticated facilities for life companies to analyse their lapse, mortality and other experience. It enables actual rates to be analysed using traditional actuarial techniques, including comparisons with expected rates, but within a modern, easy to use application. However, it goes beyond this by also providing leading edge statistical modelling techniques that are widely used by general insurance actuaries when pricing motor and household business.

Glean is closely integrated into the highly successful Prophet financial modelling suite. It is therefore easily able to read the mortality and generic tables used in Prophet in order to calculate expected rates. It also includes Prophet's Data Conversion System for the manipulation of data, including the calculation of the exposure information.

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Types of Analyses

Three different types of analysis can be carried out:

• Calculation of actual rates - an intuitive "drill down" data analysis tool is provided. This uses data cubing techniques and charts to enable you to investigate the effect of any of the factors that may affect the experience, such as product type, age, policy year and distribution channel.
• Actual versus expected ratios - complete models of your expected rates can be set up using tables of external data. These can then be compared with the actual rates using the same powerful data analysis tool.
• Generalised Linear Modelling (GLM) - allows you to analyse your experience using sophisticated statistical techniques to determine the most significant factors affecting your experience.

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Glean Excel Reporting is a Microsoft Excel™ add-in that you can use to create:

• Data Cube Reports
• GLM Model Reports

Glean Excel Reporting provides commands and functions that enable values from Glean results files to be included in reports. It also provides Microsoft Excel™ example templates.

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Applications of Glean

Glean can be used for analysing any type of past experience. The main areas in which we would expect it to be used include:

• Life insurance : Mortality, lapse, PUP and sickness inception/recovery
• Pensions : Mortality, retirement and withdrawal
• Marketing : Direct mail response rates and propensity to buy

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Management Issues

The analysis of past experience is one of the key steps in the management control cycle within a life company. The actual rates can be fed back into the pricing of new business and the assumptions used for reporting purposes.

An experience analysis provides the information which enables management action to be taken to improve future experience and also to enable the business to focus on the most profitable business and customers.

Detailed knowledge of the factors which affect take-up rates, lapse and claim experience can provide some of the key inputs into a customer value management program.

Glean has been designed specifically to meet all of a life company's needs in carrying out such analyses.

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Pricing

In today's competitive environment it is becoming even more important to accurately price products to ensure that the terms properly reflect the underlying risks. There is also a trend for pricing to take into account more factors so that the price can more accurately reflect the underlying risks, in particular for internet based sales. This requires a more detailed and accurate analysis of the past experience if the profitability of the business is to be maximised. Glean enables you to analyse the past experience using any of the possible rating factors.

Detailed knowledge of past mortality experience can be used to check the pricing of existing reinsurance arrangements and in the negotiation of the terms of new reinsurance treaties.

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Valuation Bases

Glean can be used to compare actual lapse and mortality experience with the assumptions used in embedded value, statutory reserve and other similar calculations. The expected rates can be set up in Glean on as many bases as you require, with each of them fully reflecting how the assumptions vary by product, sex, policy year, etc.

Once set up, the running of the analyses can be largely automated, thereby simplifying major reporting exercises, for example analysing the reasons for the change in embedded value.

The analyses can be run as frequently as required, thereby enabling any changes or trends in the experience to be picked up quickly.

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Sales and Marketing

Analysis of lapse rates at a detailed level can be used to monitor the experience of particular business channels and brokers / branches, enabling any under performing sales outlets to be identified and remedial action taken.

The sales achieved in marketing campaigns can be analysed to identify the factors which affect the rate of take-up, thereby enabling future campaigns to be more effectively targeted.

External marketing databases can be used to provide rating factors which are not available within the existing policy database. For example, the policyholder's postal address might be used to access socio-economic information which may be an important factor in take-up or lapse experience.

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Regulatory requirements

It is becoming more common for lapse and mortality analyses to be required as part of the regulatory environment. For example:

• In the UK, life companies are required to submit persistency returns to the FSA, analysing the proportion of policies remaining in-force for each complete year since inception.
• In the US, "Triple X", which is a new regulation covering reserving standards for certain products, requires companies to annually validate their mortality valuation assumptions against actual experience.

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Who to contact?

Further details of Glean are available on request. For more information on Glean, or to arrange a demonstration of Glean, please contact your local SunGard account manager.

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