- Background
Given today's competitive environment, there is a need for more precise information to help life insurers manage and monitor their blocks of businesses. Industry experience studies are resources companies can use in these efforts. Yet the inconsistency in the data submitted makes it difficult to aggregate data and analyze results which may lead to delays or data compromises in the reporting of results. The Individual Life Experience Committee of the SOA ("ILEC") currently requests annual data submissions from companies and has been working with companies to improve the standards of current submissions. The NAIC is also considering mandatory experience reporting requirements under a principles based reserving approach. In order to meet the growing demand for industry studies and the need for more standardized data from individual company contributors, a tool is needed to increase the quality of industry data while at the same time reducing the overall effort of data collection.
- Purpose
The purpose of this project is to create a tool for life insurers to assist with data cleansing and validation of data files for mortality and lapse experience studies and to provide reference material that addresses the educational needs of actuaries.
- Research Objective
The objective for this project is to make available a software tool or program that could be used by insurance companies in the SOA's individual life insurance mortality and lapse data collection process to increase the quality and reduce the effort of data submissions. Additionally, the researcher would develop a primer for life insurers on data quality emphasizing the methods and techniques for data cleansing, validation, and verification. This training tool should help companies improve data preparation and reporting capabilities at an individual company level in addition to providing cleaner and more consistent data submissions into the SOA experience study process. The efficiencies introduced should save time on behalf of the companies and the SOA. The data format currently requested to be used for submissions to the individual life mortality and lapse experience studies can be found on the SOA's web site at:
The end result of the research will be a software tool with appropriate documentation for company use in performing basic data cleansing functions. The software will provide a basic set of data preparatory formulas to address the needs of an (intracompany or intercompany) experience study. The data validation should address at the following three levels of review, which may be addressed in one or more separate programs:
- Data construction–ensure that fields are populated correctly
- Data analysis–ensure that field distributions are reasonable
- Experience analysis–review reasonability of preliminary actual to expected results
The tool should have the flexibility to be updated easily to reflect changes in data requirements/formats.
In addition, the research shall result in a report suitable for publication discussing at a minimum
- Data quality issues and the relationship between data quality and data accuracy?
- The role of data validation and verification in intracompany and intercompany experience study processes.
- Basic data cleansing methods and techniques
- Basic data validation methods and techniques
- Proposal
To facilitate the evaluation of proposals, the following information should be submitted:
- Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
- An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis. The researcher(s) should include in the outline the programming language to be used for the tool; why the language was selected and is appropriate for this project; and the accessibility of the tool to various technology platforms.
- Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included.
Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
- A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions.
- Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to North American Actuarial Journal or other refereed publication, SOA Monograph Series, CD ROM, posting to SOA Web site).
- Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
- Selection Process
The Committee on Life Insurance Research (CLIR) is responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but CLIR will make the final decision. The SOA's Research Actuary will provide staff actuarial support. A Project Oversight Group (POG) will be appointed by CLIR to work closely with the researcher or research team and oversee the project upon selection of the proposal.
- Questions
Any questions regarding this RFP should be directed by fax, or e–mail to: Ronora Stryker, SOA Research Actuary (f: 847.273.8514).
- Notification of Intention to Submit Proposal
If you intend to submit a proposal, please send written notification by October 31, 2007 to Jan Schuh, SOA Research Administrator, f (847.273.8556), or mail to the Society of Actuaries, 475 N. Martingale Road, Suite 600, Schaumburg, IL 60173–2226.
- Submission of Proposal
Please e–mail a copy of the proposal to: Jan Schuh.
Proposals must be received no later than November 15, 2007. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than December 31, 2007.
Note: Proposals are considered confidential and proprietary.
- Conditions
The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The Society of Actuaries also reserves the right to redirect the project as is deemed advisable.
The Society of Actuaries intends to copyright and publish the results of this research. The research will be considered work–for–hire and all rights thereto belong to the Society of Actuaries. However, appropriate credit will be given to the researcher(s).