WINTER ISSUE 2014 2015 SPOTLIGHT Wecome to the winter issue of Oasis Spotight. These newsetters are designed to keep you upto-date with news about the Oasis community. This quartery issue features an artice on our partnership with Equinix, an artice on the centra feature of Oasis, its Financia Modue, pus an update on new members. SPOTLIGHT ON CONTENTS A year of transformation Oasis is proud to work in aiance with Equinix, the word s argest provider of coocation and interconnection services. Working with Oasis during 2015, Equinix and its partners wi support impementations of the ARA hurricane mode, the Loyd s Midde East earthquake mode, and other modes under the banner of the Oasis Soutions Project (OSP). Read more > Insurance Day London Market award Amidst the gamour and gitz when the great and good gathered for the Insurance Data Awards on 4th December at the Lancaster Hote, Oasis Framework was awarded Technoogica Initiative of the Year. This foows our earier award of The Innovation of The Year Award 2014 from The Reactions magazine so is doube recognition by the industry of the innovative impact of Oasis. Many thanks to a who have heped us on our journey. Financia Modue Member update Oasis Pans 2015 Key Projects Software update Spotight on Equinix Wecome to our new Community Manager A year of transformation Cat modeing has seen some big changes aready in the past coupe of years, with Touchstone, RMS (One), WordCat Enterprise, Eements and Risk Insight a with new versions, and of course Oasis bursting on the scene. Where is this next gen going and what wi 2015 bring? We beieve it wi ook very different this time next year. The new Oasis in-memory engine wi deiver bistering speed and a new business front-end wi be adaptabe to many business workfows and provide access to any modes running in many Oasis instances. There wi be many operationa modes working, and a keen debate over what high precision modes mean for underwriting and capita-setting. If you are members, hod tight for the ride but, if not, join Oasis (free to non-insurance entities) and surf the wave of change. WINTER ISSUE 2014 2015 PAGE ONE
Financia Modue BY PETER TAYLOR The deveopment of the Oasis Financia Modue has been driven by the Financia Modue Working Party of representatives of the Oasis community, and designed around actua exampes provided by this expert group, ranging from simpe singe-site residentia poicies to compex reinsurance treaties. This information has now been pubished on the open web (http://www.oasismf.org/thetookit/documentation/) to invite more exampes, contributions and comment. The key design features of the Oasis Financia Modue are: Non-parametric probabiity distributions. Event intensities and damage responses can show significant uncertainty, sometimes muti-moda (that is with mutipe peaks rather than just a singe centra peak of probabiity). The associated vaues can therefore vary, and be represented as probabiity distributions rather than simpe point vaues. Oasis makes no assumptions about these probabiity distributions and instead treats them as probabiity masses in discrete bins, such as the bins [0,0] for no damage and [1,1] for tota damage. Monte-Caro samping. Insurance practitioners are used to deaing with osses arising from events. These osses are numbers, not distributions, and poicy terms are appied to the osses individuay. Oasis adopts the same perspective, which is to generate individua osses from the probabiity distributions by Monte-Caro samping using random numbers (as if from a rouette whee). This not ony refects our insurance experience but means we can appy with confidence the often highy non-inear and compex poicy conditions to the samped osses as if they were actua caims. Correation of intensity and damage across coverages and ocations. Correations are typicay modeed between ocations and between coverages: For ocations, the most obvious correation is that variations in intensity are ikey to be ower for adjacent properties and independent if they are far apart. Vunerabiity might aso be correated ocay if systemic variations in buiding practice due to the same buider. For coverages at a singe ocation, damage may be correated between, say, buidings and contents. Modes often just fuy correate by using the same random number to sampe the distributions for coverages at a property. A more sophisticated way is to use pairwise correation coefficients derivabe from caims data. Another way is to take a primary distribution such as buidings, sampe that and then appy a vaue for the damage to another coverage. Another route is to extend the conditiona cacuation by aowing a probabiity distribution depend on the primary distribution - for exampe, business interruption can be modeed as a probabiity distribution conditiona on buidings and contents damage. Data-driven appication of Insurance Terms and Conditions. As with cacuations of ground-up osses, Oasis uses an agnostic (i.e. independent of business or mode) data-driven (i.e. data determine the ogic paths) approach. Whether insurance or reinsurance the variations and compexities are endess and the data driven design supports a very wide range of such variations. For insurance there are in genera three types of process (a) aggregate to a eve ; (b) appy rues to determine the eement of oss that is insured; and (c) back-aocate to ower eves ready for the next eve aggregation. Reinsurances are more compicated as they can have benefitting inuring poicies. The modeing of un reinsurance programmes is not covered in Reease 1 of Oasis but, having said that, many ayered facutative reinsurances and treaties without inurings can be treated in the same way as insurance poicies. Member update Wecome to new Members and Associate Members since our ast newsetter MEMBERS Argo Managing Agency Limited Ark Syndicate Management Limited Ascot Underwriting Limited Axa Barbican Managing Agency Limited Beazey Brit Syndicates Limited Canopius Managing Agents Limited Chaucer Syndicates Limited Gen Re / Faraday Hardy (Underwriting Agencies) Limited Mitsui Sumitomo Insurance Underwriting at Loyd s QBE Underwriting Limited R&Q Managing Agency Limited Starr Managing Agents Limited W.R.Berkey Syndicate Management Limited XL London Market Limited ASSOCIATE MEMBERS CATEX COMBus Finity L and T Infotech NCAR Pitney Bowes Software RedPavia Tayor Fry Consuting Actuaries University of Adeaide WINTER ISSUE 2014 2015 PAGE TWO
Software update Oasis Pans 2015 Oasis has two streams of activity in 2015 - Oasis Core for system reeases, and the Oasis Soutions Project (OSP) to deiver the ARA hurricane mode, HurLoss. Ony Oasis Core is stricty within the remit of the Oasis Board, whie a separate soutions company, Oasis Pam Tree, deivers OSP. OASIS CORE RELEASES R1.2 wi be enhanced throughout the period to R1.5. R1.3 (February): in-memory version (C++/C) with mode data security using APIs. This is reay a beta reease for OSP and most users shoud stay with R1.2 (reeased in October 2014). R1.4 (Apri): OSP-reated fixes coming from system testing and performance benchmarking (in Q1). R1.5 (Juy): the main reease of the year where R1.2 (SQL-based) and R1.3/4 (in-memory version) are combined to deiver the main 2015 soution for Market evauation. R2.0 (2016): Reease 2.0 is a different system which supports period rather than event cacuations (e.g. for seasona or aggregate poicies) and un reinsurance structures. OASIS SOLUTIONS PROJECT (OSP) System Deveopment (Q1): continuing the deveopment started in Q4 2014 of the in-memory version of Oasis, APIs to work with the ARA mode, and the new Business Front-end which wi be designed through a Loyd s user group. This stage aso incudes deveopment of good practice Mode Vaidation within the Loyd s Market and benchmark test datasets. Core User Testing (Q2): working with a seect few Loyd s Managing Agents to test the system thoroughy before Market Evauation. Market Evauation (Q3): fu-scae testing throughout the market (and aso non-loyd s entities as decided by Loyd s) to evauate the vaue of the ARA mode used through Oasis and a new Business Front-end system. We aso expect severa commercia providers to have deveoped aternative, but not free, front-ends. In order to deiver modes in 2015, Oasis is undergoing some radica changes under the bonnet. R1.2, just reeased, incudes support for custered SQLServer and a more efficient way of computing the Monte Caro sampes using wide tabes but is sti a SQLbased cacuation. R1.2 is being refactored (i.e. ceaned up) and wi remain the principa reease through to R1.5 in Juy. In the meantime, R1.3 and R1.4 are dedicated to the high-performance in-memory Kerne which simpifies the existing SQL-based Kerne. With OSP offering user evauation of some industriastrength modes in Q3/4 2015, it is perhaps worth summarising the options avaiabe to depoy Oasis: 1. For sma modes, Oasis is designed to run on a Windows aptop or Mac with a tiers accessibe within the same machine using MySQL or SQLServer. 2. For arge modes, there are at east options which are not excusive: Large Massivey Parae Processing (MPP) appiances ike Netezza. These act (optionay) as compute engines but mosty as data stores supporting the main compute. SQLServer estates, used directy as a custer or as a back-end data store. Industria scae mid-tier processors (e.g. Xeons with 64 hyper-threaded cores and up to 1Tb of memory). 3. A possibe option to be expored is combining the industria mid-tier processors handing the inmemory cacuations with back-end Hadoop data stores for extensibe processing capacity. This may turn out to be the most attractive architecture in price/performance for many insurance businesses in 2016/2017. WINTER ISSUE 2014 2015 PAGE THREE
Spotight on Equinix Equinix provides coocation and interconnection services across more than 100 data centres gobay. We now support more than 4,500 customers that choose to depoy critica IT business systems with us, and connect them to their customers and suppy chain partners word wide. Through our goba patform of Internationa Business Exchange (IBX ) data centres, spread across 32 markets in 15 countries, covering the Americas, EMEA, and Asia-Pacific, we aim to offer businesses a high quaity coocation service deivered on a consistent basis regardess of ocation, where they can safey and reiaby house IT operations and securey exchange critica information between respective counterparties. We do this by concentrating on what we do best operating data centres and ensuring they are connected to the maximum number of carrier networks possibe, rather than offering numerous additiona products such as fuy provisioned managed services. Such offerings can be purchased from our huge network of word-cass service providers to achieve the exact mix of managed service and contracting arrangements a customer requires. From an Oasis perspective, Equinix can hep both the project and its members in a number of ways: 1. Equinix has estabished a speciaist insurance coocation and interconnection team, based in London, that eads the company s invovement with the industry, yet operates gobay through designated staff and partners. 2. Our goba footprint means that we are amost aways aready on the ground wherever there is a major centre of insurance activity, or emerging insurance market; incuding London, Frankfurt, New York, Dubai, Brazi and Singapore etc. 3. Our vertica approach enabes us to gather communities of interest together to produce soutions that are directy reated to actua chaenges that insurers are experiencing. As an exampe of this, we recenty competed a project to move the operation of AIR Wordwide modeing systems to coud operation. Assembing a partnership of service providers and insurers to buid an functioning coocation environment from which the new coud technoogy coud be tested as a proof of concept (PoC) This invoved: A managed service suppier to buid and operate the infrastructure AIR Wordwide themseves for the modeing software A hardware suppier to provide the appropriate hardware An underwriting test partner, drawn from the London Market The PoC was conducted entirey free of charge to the testing partner, and has resuted in a tried, tested and operating soution, now being sod as a commercia product. As a resut of our recent efforts, Equinix data centres are now home to various London Market organisations and goba insurers, incuding a centra body, two Loyd s Syndicates, two internationa reinsurers, a top-five broker and various companies providing IT services to the Insurance Market. This growing insurance footprint is enabing Equinix to become invoved in the areas where we can deiver greatest vaue to insurers - through service interconnection and access to new IT services such as coud technoogy. Equinix is working hard to give our customers safer and smarter interconnection options, as we as enabing direct access to mutipe coud service providers, bypassing the pubic internet by everaging our coud connect cross-connect product, the Equinix Coud Exchange, and our new access route, Performance Hub. These Ethernet-based technoogies improve performance and security, whie reducing costs, and are ready to pay a major roe in the effective deivery of the modeing service Oasis is faciitating. In Oasis terms, this wi aow us to assist our customers in their design of modeing architectures, taking the risk and performance issues of Internet connectivity out of the equation. Insurers can then experience a the benefits offered by coud technoogy within a secure and safe data centre environment, near to where their business offices and end users are. Equinix firmy beieves that coud computing s software, patform and infrastructure-as-a-service (SaaS, PaaS and IaaS) soutions can be used in a secure fashion if they are impemented correcty, as part of a baanced IT infrastructure mode, with securey controed connectivity and access. Such impementation aows access to private or hybrid coud, as we as direct connection to pubic coud service providers, incuding eading payers such as Amazon and Microsoft. This approach wi aow Oasis customers to everage the power of the coud to get maximum efficiency from their modeing investment. Finay, and in order that insurers can maintain compete choice in the way that they host and operate their modes, Equinix can aso faciitate connectivity to dedicated hardware if so desired In concusion, Equinix strongy beieves that the insurance market, a market that is aready a natura ecosystem, wi derive huge benefit from deveopment of a true digita ecosystem making it easier and more effective to transfer data between market stakehoders. Equinix wi use its experience from the word of capita markets to hep drive this digita economy into the word of insurance, but at the same time, through its experienced market professionas, Equinix wi aways remain mindfu of the painfu essons of the past to deveop and encourage effective yet workabe proposas for the market. WINTER ISSUE 2014 2015 PAGE FOUR
Wecome to our new Community Manager I woud ike to introduce mysef, my name is Juia Arevao and I recenty joined the team as a Community Manager. As a Community Manager I am responsibe for keeping our website up to date and making sure a our members are informed about opportunities and deveopments in the Oasis community and keep you aware of the atest news, meetings and events. What woud you ike to see from our newsetters in future? Pease emai me with your thoughts and ideas (juia.arevao@oasismf.org). In the meantime I hope you enjoyed this edition. Community Manager of Oasis Juia Arevao Te mob: +44(0)7563265331 Emai: juia.arevao@oasismf.org We woud ike to take a moment to express our appreciation for your business and et you know that we ook forward to continuing to serve Season s you in the coming year. As you ceebrate this season of joy and peace, know that we send the warmest of wishes your way. greetings WINTER ISSUE 2014 2015 PAGE FIVE