Introduction To Prophet PDF

iWorks Prophet
INTRODUCTION TO PROPHET TUTORIAL
Release 8.0.2
© 2011 SunGard
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Document No: PR802-3001-0411 4473 27/04/2011 : 20:49:53
CONTENTS
Welcome to SunGard iWorks Prophet Professional 1

How this tutorial is organised 3
Setting up a simple product 5

What is a product? 6
Tutorial product details 7
Starting the tutorial 11
A Tour of Prophet Professional 8 14
The product design process 16
Tables used by products 17
Creating the product 18
Selecting the indicators 20
Specifying the input variables 26
Additional information 39
Extended Lesson 42
Setting up model point files and tables 61

Introduction 62
Setting up a structure 63
Setting up the model point file 65
Setting up a parameter file 69
Setting up a global file 72
Setting up, running and reporting on a product 77

Setting up a run setting 78
Running the product 86
Identifying why a run has failed 89
Viewing results produced in a run 92
ii
Reporting on dependencies in Diagram View 97

Introduction 98
The Diagram View window 99
Using Diagram view to identify how to change the product 102
Updating libraries and products 105

Adding a new variable to the library 106
Updating the product 111
Scenarios that show the effects of product changes 123
Identifying an error in the run 125
Further topics 127

Regeneration of products 128
Re-scanning of products (Auto-Scan) 129
Conclusion 130
Conventional product input files & results 131

Product listing 132
Model point files 143
Parameter file 144
Global file 145
Results 146
International product input files & results 151

Product listing 152
Parameter file 163
Global file 164
Results 165
1
Welcome to SunGard iWorks Prophet Professional
SunGard iWorks Prophet is an enterprise-wide actuarial modelling system. It is a leading risk management platform
used by the financial services industry around the world to model companies’ financial business.
Prophet Professional is the desktop platform. It is an integrated suite of actuarial systems used primarily by
insurance companies to perform actuarial calculations including
l Profit testing
l Projections
l Statutory valuations
l Asset liability modelling
l Stochastic modelling and
l Risk management
Currently used by over 7,500 people in over 500 companies in more than 55 countries around the world.
About this tutorial

If you are new to Prophet or want an overall perspective of the main features then this is the tutorial for you. On
completing the tutorial you will be able to:
l Set up and run the calculations for a single traditional insurance product using a library containing variables
used for the calculations.
l View the generated results of the product calculations

2 Welcome to SunGard iWorks Prophet Professional
l Use Diagram View to analyse and update the product
The tutorial also shows you how to monitor the effects of changes made to a product and how new calculation
variables can be added to a library.
Pre-requisites
Before you start this tutorial you should ideally spend some time reading Chapters 3 and 4 of the Prophet User's
Guide. This will provide you a background to some of the screens, menus and options that are available.
In particular, to get the most out of this tutorial it is assumed that:
l You have an understanding of actuarial concepts.
l You are comfortable with using Microsoft Windows and understand how to choose menu commands, select
text, drag and drop items and other standard windows procedures
It is expected that by the time you complete and run your single insurance product you will have mastered the basic
principles involved in creating and managing a product. Your subsequent products will then become easier to
develop.
Library requirements
This tutorial assumes that you will be creating and managing traditional insurance products using either the
Conventional or International library supplied with Prophet. In particular:
l The Conventional library is focused on the product features common in the UK and is also applicable in other
markets such as Australia and South Africa.
l The International library is focused on the features common in continental European markets except for the
German, French and North American markets for which specific libraries are available.
NOTE: This tutorial does not support the German, French or North American libraries. Separate versions of this
tutorial are available that can be used with these libraries.
How this tutorial is organised 3
How this tutorial is organised

The tutorial is set out in a number of lessons each of which can be regarded as separate. You can take a break at
the end of any lesson. However, the lessons need to be tackled in the specified order as each lesson uses and
depends on the results from the previous lessons.
The tutorial is divided into the following lessons:
l Setting up a simple product

In this lesson you set up a simple Prophet "product". Products are the central components of Prophet and
contain the formulas and inputs used to model each insurance policy.
l Setting up test model point files and tables

This lesson introduces you to the Prophet Table Editor. You set up some policy data to be used by the product
specified in Lesson 1. You also set up the tables it uses.
l Setting up, running and reporting on a product

In this lesson you first set up a run setting to project the product specified in Lesson 1. You then execute the
product using the data and tables set up in Lesson 2. Finally you look at the results from within Prophet.
l Reporting on dependencies in Diagram view

In this lesson you use Diagram view to inspect the formulas used in your product and the dependencies
between them. This facility is useful both for understanding how the formulas interrelate and for debugging
purposes.
l Maintaining an actuarial library and updating the product

In this lesson you are introduced to the processes involved in updating the underlying library. You add a new
variable to the library and update your product to use it. You also make a number of further changes to your
product so that you are introduced to some more Prophet features.
l Further topics
In this lesson you learn about a number of further features of Prophet such as Regenerate and Auto-Scan.
4 Welcome to SunGard iWorks Prophet Professional
l Conventional and International reference sections

These two sections contains the definitions of all the variables and tables used and produced as you go
through the tutorial using either the Conventional or the International library.
You can compare your products and tables with these to check your work and to help you diagnose any
problems that may arise during the tutorial.
5
L E S S O N 1
Setting up a simple product
In this lesson you will start Prophet and use it to set up a Prophet product to carry out the calculations for an
insurance product.
TOPICS IN THIS LESSON
What is a product? 6
The product design process 16
Extended Lesson 42
6 Lesson 1 Setting up a simple product
What is a product?
You can think of products in Prophet as computer programs. The only difference is that Prophet takes care of much
of the programming and you need only specify the actuarial calculations required.
You set up products in Prophet to reflect both your insurance products and your business requirements. For
example, you can set up a number of conventional, unit linked and summary products in order to calculate
embedded values.
Products and actuarial libraries

A product is associated with a library of actuarial formulas from which it is defined. For example, a conventional
product is a product defined using the Conventional library. Similarly, a summary product is a product set up using
the Summary library.
The first letter of a product name identifies the library from which it is defined. For example, a product named C_
TERM is based on the Conventional Library and a product named U_MIP_ is based on the Unit Linked Library.
Variables and indicators

A product also consists of a number of input and core variables which together define the calculations to be
performed. When you specify a product you select a number of indicators for it. These indicators define the scope of
the calculations required and determine which variables are included.
l Input variables
These define the calculations which can vary from product to product or from company to company. When you
create a new product default definitions for each input variable are presented on the screen, based on the rules
specified in the associated library. You can then accept these definitions or modify them to enable you to
specify the exact calculations you require for each product.
l Core variables
The appropriate core variables are included automatically for each product, based on the rules specified in the
associated library. Core variables are used to define calculations which are generally generic in nature, for
example commutation functions and basic accounting relationships.
Tutorial product details

The product that is modelled in this tutorial is a simple one so that it can be set up using either the Conventional or
the International library. The details of the product that are covered include:
l Benefits
l Premiums
l Expenses
l Commission
l Taxation
l Reserving
l Mortality Experience
l Lapses
l Future Investment Earnings
l Discount Rates
l Projection Data
Note that the tutorial is primarily concerned with showing you how to use Prophet. It does not address actuarial
issues such as the appropriateness of the calculations for any specific company or country.
Benefits
The product is a non-profit endowment, so there is a guaranteed sum assured payable on death or maturity.
A surrender value of half the premiums paid, accrued with 5% interest p.a., is payable in the first two years. After
that, the surrender value is equal to the net premium reserve using 100% of the mortality table AM92 Ultimate for
the Conventional product and GKM80 for the International product and an interest rate of 5%.
Premiums
Premiums may be paid annually, half yearly, quarterly or monthly.
Expenses
Initial expenses are currently 160 per policy. Renewal expenses are currently 24 per policy per annum and are
expected to grow in accordance with the Consumer Price Index (assumed to be 4% per annum).
Commission
The office pays an initial commission as a percentage of the first year's premiums, according to the following table.
This is paid in full on inception with “clawback” if the policy lapses before 2 years premiums have been paid in the
case of the Conventional product and 1 year in the case of the International product. Commission rates for
intermediate numbers of years are obtained by interpolation. Renewal commission of 3% of premiums is paid after
the first year.
Policy Term in Years Initial Commission %

0-5 10
10 25
15 35
20 - 30 40
Taxation
For the Conventional product you will assume that the office is a mutual. Hence, taxation will be on an "investment
income minus expenses" basis with tax rates assumed to be 20% on franked investment income and 25% on other
income less expenses.
For the International product profits are taxed at 33%.

Reserving
The net premium method is used for reserving purposes, using 100% of the mortality table AM92 Ultimate for the
Conventional product and GKM80 for the International product, and an interest rate of 3%. A Zillmer adjustment is
not used
The product will include a solvency margin. You will use the European solvency margin requirements, namely 4%
of the reserves and 0.3% of the sum at risk.
Mortality Experience
The current mortality experience is 85% of the mortality table AM92 Select for the Conventional product and 85% of
the mortality table GKM80 for the International product. This is expected to continue.
Lapses
At present, lapse rates are as set out in the following table and this experience is expected to continue:
Years in Force Lapse Rate (%)

£1 10
£3 7.5
thereafter 3
Future Investment Earnings

The company expects to earn 7% gross on equities (made up of 3% income and 4% growth) and 5% gross on fixed
interest government stocks (all made up of income). The product is backed 75% by equity type investments and
25% by fixed interest type investments. 15% of the equity type investments are assumed to be realised each year,
with reinvestment into similar investments.
Discount Rates
Future profits will be discounted at three different rates of 6%, 8% and 10% to put a value on the business.
Projection Data
The product will be run using policy data as at 31 December 2010.
Starting the tutorial

The tutorial requires that Prophet is installed on your PC. If you have not yet installed Prophet then please refer to
the Installing Prophet section of the Prophet Technical Guide.
Starting Prophet and creating a new workspace

To start Prophet do the following:
l Click the Start button on the Windows desktop and point to All Programs.
l Select the SunGard iWorks program group, then Prophet Professional 8.0 and then click the Prophet
Professional option.
l The Prophet start page is then displayed.

Creating a new Prophet workspace

A workspace is the environment in which you work with Prophet and consists of objects such as products and
libraries. Some objects, such as products, are saved in the workspace file (prophet.prw). File objects such as table
files that are referenced in the workspace are usually stored in the same location as the workspace or in its
subfolders.
To create the new Prophet workspace:
l Create a new workspace with standard libraries by clicking on Create a New Workspace as shown below
l If you have permissions enabled you need to enter your username and password as specified by your
administrator
l The dialog below will open
l For the purposes of this tutorial enter C:\Prophet_Tutorial as the location of the New Workspace that you will
create.
l Enter a suitable description, for example "Introduction to Prophet Tutorial Workspace".
This tutorial uses the Standard Libraries (Conventional or International), but not the full example template, so:
l Select the Install Template option and, if necessary, select Example Model Office from the drop-down list.
l Select the Install Libraries Only option.
l Click OK to create the new workspace. The screen should look as shown below
A Tour of Prophet Professional 8

During the tutorial certain areas of Prophet may be referred to. Although you won't be able to see all of the panels
and areas now, the diagram and descriptions below will be useful for reference.
The Ribbon
This is at the top of the screen it is from here that you can perform actions on the objects opened in the Main
Window or selected in the Tree or the List. There are 4 main Ribbons: Home, Object, Utilities and Support and 4
context sensitive ribbons Design, Diagram, Table and Print Preview. Each ribbon is subdivided in sections.
The Tree and Accordion

This is to the left of the Main Window. The accordion is the section at the bottom, and it is from here you can choose
the starting point of the tree. The tree has been designed to show the interrelationship between the different
Prophet objects. You may find it useful at the end of this tutorial to explore the new product you have created.
The Prophet Button and Quick Access Toolbar

This is the button with the Prophet logo in the left hand corner; similar to Microsoft Office. It contains general actions
and a useful Options button. To the right of the Prophet Button is the Quick Access Toolbar which can be
customised.
The Main Window

This is generally editable and is where details of opened objects are displayed.
The Level Tabs

There are three level tabs which give context to the open windows; the top level can be expanded to view the
objects as a list. The top level may not be showing when you first open Prophet Professional 8. To view it, click on
the Group Tabs button in the View section of the Home Ribbon.
Other features mentioned in the diagram above may be useful to explore after this tutorial.
The product design process

The process involves
l Creating and specifying the product, this involves selecting indicators and therefore variables to be used by the
product. Variable definitions can also be changed so that they use values from data files.
l Creating data files used by the product.
l Specifying the products used for the calculations. A structure is used to specify which products and
accumulations are used in a calculation run. An accumulation is used to sum the results from more than one
product calculation run.
l Specifying calculation run settings and running the product calculations. The run setting specifies amongst
other options which tables are used and the type of results to be produced. Once the run setting is specified
you click Run to start the calculation run.
l Displaying and analysing the results of the calculation run.

Tables used by products

l Model Point File. This file contains all the policy specific information, for example the age at entry of the
policyholder.
l Global File. This file contains information which is the same for every product in the run, for example the
consumer price index inflation rate.
l Parameter File(s). These files are used for the product specific information, which is the same for all the
policies of a particular product, for example the annual renewal expense per policy for each product.
Creating the product

From the accordion select Products and Accumulations.
In the Edit section of the Home ribbon click on New. Then select New Product.
Fill in the details as in the dialog below:
l Name
The product Name has to be six letters long. The first letter in the product name refers to the library which is
being used and cannot be changed. If you are using the Conventional library, the first letter of the product must
be a C. For the International library the first letter must be I. For the rest of the Name, type _ENDT. That is, the
name is either C_ENDT or I_ENDT.
l Description
This describes the product. Enter Tutorial Product.
l Library
Allows you to choose the library used by the product. It is automatically set as soon as the first letter of the
product name is entered.
l Same As
Allows you to specify that a product is the same as another product. In this case Prophet would carry out exactly
the same calculations as for that other product, but it uses its own model point file, its own name when
accessing parameter file(s) and produces its own results. Hence you do not need to specify the calculation
rules separately. This option is not selected for the tutorial product.
l Level Number
Allows you to specify the order of processing of products and accumulations. Retain the default value of 10.
Additional product property option

The following options can be applied to a product. They are not however, used in the tutorial product that you are
creating.
l Use in memory dynamic/stochastic calculations

This option allows you to perform dynamic runs in memory which speeds up the calculations. This option is not
used for the tutorial product.
l Apply strong t-limiting

This option allows you to optimise the calculated time periods in dynamic runs. This option is not used for the
tutorial product.
l Use a separate calculation array for each model point

This option allows you to specify that each variable for each model point has its own array in memory. This
option is not used for the tutorial product.
When you have entered the options click OK. The Select Indicators dialog is then displayed from which the
indicators for the tutorial product are selected.
Selecting the indicators

When you have completed the Product Properties dialog and clicked OK you are presented with the Select
Indicators dialog which appears similar to the following:
The dialog shown above is for the Conventional product but the one for the International product is similar.
Indicators define the broad outline of the product and are used to determine which variables are brought into the
product. This can be best explained with a simple example:
An indicator is associated with a particular feature you want your product to have, for example a regular premium
policy would require the indicator REG_PREM. By choosing this indicator you will be provided with those input and
core variables required to model a regular premium product. If you don't select it you will be provided with the
variables to model a single premium product.
The indicators therefore specify the broad scope of the product and limit the available variables to only those
required for the product.
Note the following:
l In the list on the right all the indicators selected for this product are shown with their description and code. For a
new product these are the indicators that are selected by default.
l The middle list contains the indicators that are available but have not been selected for the product. By
selecting an indicator and clicking on > you can move the selected indicator to the selected list on the right.
l The indicator outline on the left displays the indicator categories. When you select a category, for example "H -
Product Types", only those indicators associated with the category are displayed.
l Every indicator has a code that has a letter followed by a 2 digit number. The letter specifies the indicator
category, listed in the outline, to which the indicator belongs. The number specifies the location of the indicator
in its category.
l You can resize the Select Indicators dialog by "grabbing" the right hand corner of the dialog with the mouse
and sizing the dialog to the desired size. You can also drag the horizontal scroll bars across to display these
codes and the dividers that separate the panes.
l The Hide Unselectable option at the bottom of the dialog enables you to hide or display those indicators that
cannot be selected or used by the current product.
l The Hide Advanced option at the bottom of the dialog enables you to hide or display advanced indicators. An
advanced indicator is specified in the library used by the product and is mainly used for complex models.
l The Show Selection Criteria option enables you to hide or display the Indicator Selection Criteria pane which
can contain an indicator expression associated with a selected indicator. An indicator expression is specified
for an indicator in the library used by the selected product. The expression specifies whether the indicator is
dependent on the presence or absence of other indicators. Generally, selecting such an indicator also selects
other indicators as specified by the conditions specified in the indicator expression.
l The panel at the bottom of the dialog displays actuarial documentation for the selected indicator or indicator
category. The documentation explains the purpose of each indicator and the features that could be included in
the product if the indicator is selected.
l If you click Wizard in the bottom left corner an Indicator Selection Wizard is displayed which makes it easier for
you to see the documentation for each indicator and to select the indicators that you require.
Default Indicators
Let's take a look at the indicators that are selected by default:
Indicator Description
ALWAYS Brings in variables that are required in every
product. For example, the age at entry and policy
term variables.
PROJ Used to project business that is already in force
and new business. It brings into the product
variables that define, for example, the expired
duration and currently declared bonus (if the
product is with-profit). If not selected then these
variables are not included and only new
business can be projected.
REG_PREM Used if premiums are to be paid regularly (that is
the product is not a single premium contract).
ENDOWMENT Used for an endowment type product. If you wish
to model a different type of product, then you
would deselect the ENDOWMENT indicator and
select a different indicator (for example WHOLE_
LIFE for a whole life contract).
SURR_VALUES Used if a surrender value is payable on early
termination of the policy. If not selected, then it is
assumed that no surrender value is paid if the
policy lapses (as would be the case for a term
assurance product).
OTAX_ON_I_E The tax indicator selected by default for a new
Conventional business product. It is used if the
tax payable by the office is based on a
percentage of investment income and realised
chargeable gains less relievable expenses and
annuity payments. This is the basis that applies
to life business in the UK.
OTAX_ON_PROF The tax indicator selected by default for new
International products. It is used if the tax
payable is calculated as a percentage of gross
profit.
ONE_VALBASIS Used if the same valuation basis is applied to
the attaching bonus (if with-profits) and paid-up
policies (if specified) as is applied to the basic
benefit.
DISC_PROFITS Used if Prophet is needed to calculate the
discounted value of future profits. It allows the
discounting to be at three different interest rates.
Adding an additional indicator

For the tutorial product you also need to add the SOLV_MARGIN indicator by double clicking on it in the middle list
of the Select Indicators dialog.
Alternatively, you can locate the indicator by clicking the "Q - Solvency Margin" category in the outline which then
displays only those indicators associated with the category. In this case it is the SOLV_MARGIN indicator only.
The Indicator Wizard

If you click Wizard the Indicator Selection Wizard is displayed. There is one step for each of the indicator categories.
You can select or deselect an indicator using the appropriate checkbox. This makes it much easier to select the
indicators you are interested in.
In the Solvency Margin section shown below, make sure the box next to the SOLV_MARGIN indicator is ticked.
Click Finish to return to the Select Indicators dialog.
If you click "All Indicators" in the upper left pane in the Select Indicators dialog then all the indicators selected for the
tutorial product are displayed in the right hand list. For more information on any of the indicators refer to the relevant
chapter of the Conventional or International Library Manual or to the actuarial documentation in the bottom pane.
Click OK to accept the list of indicators. In the main window the new product is opened and the list of input variables
is displayed in the C_ENDT Preview (or I_ENDT Preview) tab.
Specifying the input variables

After you have selected the indicators to be used by the product you next specify the input variables for the product.
You can see that all the variables have status "Not Defined".
To produce the list of input variables Prophet has scanned the library and brought into the product all the input
variables with default definitions that match the indicators that have been selected. Input variables are those which
need to be defined for each product. At a later stage, “core” variables are added to the product to complete the
specification of the calculations. Core variables are not displayed since their definitions apply across all products.
More detailed information about input variables is given in the additional information section at the end of this
chapter.
Defining the variables in the product

You are now in a position to begin entering definitions for these variables so that they reflect the product details
listed earlier in this lesson.
To look at the default definition for a variable click on it in the C_ENDT Preview tab and the definition appears in the
bottom pane. You can drag the divider up if it is not fully visible. You can go up and down the list and define
variables in any order. However, for a new product it is sensible to define them in variable code order. You can re-
order them by clicking on any of the column headings. To change the definition of a variable, either select it and
click Open or double-click on it.
As with indicators, each variable is assigned to a category by its variable code. This code is made up of two letters
followed by a two digit number. There is an arrow to the right of the Code heading along the top of the main
window; this can be used to filter the input variables by category.
The filter initially just shows the description for the first letter of the category. If you click on one of the plus signs it
will open up to show the descriptions for the two letter categories and will filter the list of variables.
In the following sections you will specify the input variables within each of the categories.
As we will be accepting most of the default input definitions, this tutorial can be approached in two ways. In the main
body only the variables which require change are listed.
If, however, you wish to define every input variable and also have some useful background information please skip
to the section Extended Lesson at the end of this chapter.
General variables
These have a variable code beginning with A. If necessary, click the Code column so that the AGE_AT_ENTRY
variable is at the top of the list
To see the definition for the AGE_AT_ENTRY (age at entry) variable, select it in the list and double click or click
Open from the Home Ribbon. A new window underneath the C_ENDT product has opened called AGE_AT_
ENTRY. The Design ribbon menu has appeared and the definition for the variable is displayed.
The default definition for AGE_AT_ENTRY is Model Point. This means that when the product is run, Prophet will
read the value to be used for this variable from the model point file that you will set up for this product. This file will
contain lines to represent different policies. Each line may represent an individual policy or it may represent a
number of policies that have been grouped together.
Accept this definition by clicking on the OK or Next icon. As part of this process Prophet checks the definition for
any syntax or similar errors.
PREM_PAYBL_M variable
The variable PREM_PAYBL_M (number of months premiums payable) should be defined as a Model Point. To do
this, open the variable, click Change Definition Type and you will see the following dialog:
Select Model Point and click OK. Notice how the icon shown for the open window for PREM_PAYPL_M has
changed to reflect this.
From to
Save the definition by clicking on Ok.
PREM_FREQ variable
PREM_FREQ (premium frequency) should also be defined as a Model Point.
No other variables in this category need changing.

Benefits
The following variables relate to the benefits aspect of the tutorial product, these have a variable code beginning
with E.
SURR_VAL_PP variable
The default definition for SURR_VAL_PP (surrender value per policy) needs to be amended to allow a surrender
value of half the premiums paid accrued with interest to be paid in the first two years.
Replace the lines:
IF t <= NIL_SURR_P_M THEN

0
With
IF t <= 23 THEN
(SURR_VAL_PP(t-1) + PREM_INC_PP(t) * 0.5) * (1 + SURR_INT_PC/100)^(1/12)
l Type the changes directly into the formula.
Instead of typing the name of the variable SURR_VAL_PP in full, you can type SUR and press F3 to list all the
variables that start with SUR. You then locate and select SURR_VAL_PP and click OK to enter it into the formula
definition.
The surrender value at the end of month t equals the surrender value at the end of month (t-1) plus half the premium
paid in month t, accrued with interest.
The variable t (time) runs in months from 0 immediately prior to the issue of the policy up to the end of the policy
term.
This formula introduces some of the syntax available for formulas as well as some "best practice" guidelines for
entering formulas using Prophet:
l t (time) is entered in lower case type.

l Although excess spaces in the formula are ignored, for readability you should indent the code below IF and
ELSE lines by two spaces.
If there are any syntax errors in the formula or if it contains any invalid variable names then Prophet will not accept
the definition. However, this formula includes a deliberate mistake in the logic so that later in the tutorial you can
see how Prophet handles such errors. Can you spot it now?
When you have amended the formula, click OK to accept the changes.
The list of input variables is then displayed.
SURR_NETPREM variable
In the list of variables, click on SURR_NETPREM (surrender net premium). You can see in the bottom pane that it
has a formula definition that references SURR_ZILLMER (surrender Zillmer). If you look at the list of variables in the
C_ENDT Preview window, you will see that the list does not include SURR_ZILLMER at the moment. However, if
you now click Open to open the variable SURR_NETPREM and click OK to accept its default definition, you will see
that the variable SURR_ZILLMER has been brought into the list of variables.
Prophet expands the list of variables as you accept definitions - this approach is adopted so that variables are not
brought into the product unnecessarily. For example, if you had wanted to change the definition of SURR_
NETPREM so that it did not use SURR_ZILLMER, that variable would have been needed in the product. These
variables (such as SURR_ZILMER in this example) are called Secondary Input variables.
SURR_INT_PC variable
l The interest rate at which the surrender value is calculated is 5%, so for the variable SURR_INT_PC (surrender
interest rate) click Open, type 5, delete the 0 and click OK.
It would be better to define SURR_INT_PC as a parameter definition but this allows you to practice amending a
constant definition in this tutorial.
Reserving / Solvency / Accrual Methods

These variables have a code beginning with F; we will accept the default definitions for all of the variables in this
category.
Interest Rates
These variables have a code beginning with G. The following five variables represent the components of the
investment return.
Variable Description
FII_PC Annual rate of franked investment income
UFII_PC Annual rate of unfranked investment income
RCG_CHG_PC Annual rate of chargeable realised capital gain
RCG_UNCHG_PC Annual rate of unchargeable realised capital
gain
UNRCG_PC Annual rate of unrealised capital gain
The actual values that should be entered will be discussed in the next chapter, Lesson 2, when you set up the
model point files and tables. The values of these variables (which are essentially interest rates) may change
between groups of products. For instance, non-profit and with-profit products will usually be backed by different
mixes of assets. You will amend these variables to refer to other variables which will read the appropriate values
from the global file.
One way to do this would be to open each variable, click Change Definition Type and then select Formula, change
the formula to reference the required variable and click OK as with SURR_VAL_PP. However, this is not necessary
since the required formulas have already been set up as "alternative definitions". Alternative definitions are
alternatives to the default definitions and have been set up in the libraries for a number of variables where
commonly used alternatives exist.
Open the FII_PC variable, click Select Definition. The following dialog is displayed for the Conventional product (a
similar dialog is displayed for the International product):
Click on the line:
NON PROFIT BUSINESS 6 Formula Alternative
and then click OK to accept this.
Repeat the process you have carried out for FII_PC for the other four components of investment return (UFII_PC,
RCG_CHG_PC, RCG_UNCHG_PC and UNRCG_PC) always selecting the "NON PROFIT BUSINESS" alternative
definition.
SOLV_INT_PC variable
The variable SOLV_INT_PC is the interest rate on the solvency margin and should be changed to a global
definition.
Tax
These are variables with a code beginning with H. We will use the default definitions for all of the variables in this
category.
Commission
These are variables with a code beginning with I. The following variables relate to commissions.
IC_PAYBL_PP variable
The first commission variable is IC_PAYBL_PP (initial commission payable per policy).
For the C_ENDT tutorial product accept the default definition (by opening and clicking on Ok).
For the I_ENDT tutorial product you need to amend the default definition as it currently spreads initial commission
payments over the first year, depending on the frequency of premium payments. One way to do this is to open the
variable and change the formula to make the commission payable on inception. A better option is to make use of an
"alternative definition". Click on Select Definition as before and in the Select Definition from Library dialog select the
line starting with "INDEMNITY COMMISSION PAID MTH1" and click OK. You will see that this is a formula that pays
all the initial commission in the first month. Click OK to accept the alternative definition.
IC_RATE_PC variable
You are now going to use the variable IC_RATE_PC to define the initial commission rate. The following formula
defines the percentage of annual premium that is paid as initial commission:
IF POL_TERM_Y <= 10 THEN

3 * POL_TERM_Y - 5
ELSE IF POL_TERM_Y <= 15 THEN
2 * POL_TERM_Y + 5
POL_TERM_Y + 20
ELSE
40
To enter the formula:
l Open the variable IC_RATE_PC and click Change Definition Type.
l Select Formula and type in the formula shown above. Note that you can use Cut, Copy and Paste in the same
way as in other Windows applications.
l After entering the formula, click Ok to accept it.
If there are any syntax errors in the formula, an error message with the probable location of the error is displayed.
Note that this approach demonstrates how to use a formula to define initial commission rates. A formula is only
feasible if there is a pattern in the values. In Lesson 5 you will see how these values can be entered in a table that
can be read by the product.
IC_EARNL_PP variable
For the C_ENDT tutorial product accept the default definition.
For the I_ENDT tutorial product use the alternative definition for IC_EARNL_PP (initial commission earned on
lapses per policy).
To do this:
l Select the IC_EARNL_PP variable and choose Select Definition.
l Click on the line beginning with "EARNED UNIFORMLY OVER N MONTHS" and click Next.
RC_PAYBL_PP
Accept the default definition.
RC_RATE_PC (renewal commission rate).

Apply a parameter definition to the variable.
Expenses
These variables have a code beginning with J and relate to the expenses aspect of the tutorial product.
INIT_EXP_PP variable
The next variable in the list is INIT_EXP_PP, the initial expense per policy. You will see that this is made up of three
components: a fixed per policy expense, a percentage of the sum assured and a percentage of the annual
premium.
To model this product you are just using a fixed per policy expense. You should accept the formula for INIT_EXP_
PP using Ok.
IE_FIXED variable
For the IE_FIXED (fixed initial expenses) variable change its definition to a parameter type.
REN_EXP_PP variable
The Conventional library formula for REN_EXP_PP (renewal expenses per policy) is:
IF t >= RE_START_M AND t <= POL_TERM_M THEN

RE_FIXED_Y/12 * RE_INFL_ADJ(t-1)
ELSE
0
The International library formula for REN_EXP_PP is:

+ RE_AP_PC/100 * ANN_PREM_PP(t)
ELSE
0
By looking at the formulas for REN_EXP_PP you can see that the variable RE_START_M is the month in which
renewal expenses are first assumed to be incurred. This normally depends on how expenses are analysed in the
office. The formula indicates that renewal expenses are incurred in each month during the policy term in and after
this "start month". Their amount increases with inflation from the start of the projection period.
For the Conventional library definition accept the default definition for REN_EXP_PP.
For the International library formula note the following additional line:
This allows renewal expenses to be expressed as a percentage of the annual premium. As you are only assuming
fixed renewal expenses, you could delete this line from the formula but this would make your product less flexible.
International library users should therefore also accept the default definition of REN_EXP_PP.
RE_FIXED_Y variable
Define RE_FIXED_Y (fixed annual renewal expenses before inflation) as a parameter type.
Mortality
These variables have a code beginning with K and relate to the mortality aspect of the tutorial product.
Q_EXP_PN variable
The next variable is Q_EXP_PN which specified the mortality table used for the experience basis.
For the Conventional product C_ENDT the mortality table AM92 is used, so accept the default definition.
For the International product I_ENDT the mortality table GKM80 is used.
The location of the mortality tables is set when Prophet is first installed. For example:C:\Documents and Settings\All
Users\Application Data\SunGard\Prophet80\MORT. You can check this location in Table Options on the Prophet
Button
To select a different table click on Browse, browse to the mortality table location as mentioned above and select the
relevant table. Note that GKM80 is an ultimate table, but the Select/Ultimate setting can be left unchanged as
Prophet will ignore this setting for an ultimate table.
PROP_EXPQ_PC variable
Amend PROP_EXPQ_PC, the percentage of the experience mortality rates, to be a parameter definition type.
Q_SURR_PN variable
The next variable is Q_SURR_PN which specifies the mortality table used for the experience basis.
For the Conventional product C_ENDT the mortality table AM92 is used, accept the default definition.
For the International product I_ENDT change the mortality table to GKM80 as above.
Q_VAL_PN variable
This specifies the mortality table used for the valuation mortality basis.
PROP_VALQ_PC
The percentage of the valuation mortality table used should be a parameter definition type, so you should amend
this accordingly.
Decrements
These variables have a variable code beginning with L.
The next variable to change is ANN_LAPSE_PC, which is the percentage of policies that lapse or surrender each
year. You will notice from the formula as it stands that you are allowed to enter different lapse rates in the first year;
the second year; and then after the second year. You want to amend the formula so that there are different lapse
rates in the first year; the second and third years; and after the third year. To do this, go to the following line:
ELSE IF t <= 24 THEN
If you change the 24 to 36, then the line YR2_LAPSE_PC * YR2_LAPSE_SY will apply during the second and the
third years. All other variables in this category will use the default definition.
Initial Values
These variables have a variable code beginning with N.
INIT_POLS_IF
This variable (initial number of policies in force) should be given a Model Point definition.
Saving the product

On the home ribbon click Save. The warning below will be displayed.
If you are doing the longer version of this tutorial, click Cancel and return to the product. Then find the definitions
that have status Not Defined and check their definitions from the section at the end of this chapter.
For the quicker version of the tutorial click OK.
You should then see the following dialog:
Click OK to save the product.
The product has been saved and you can view it in the tree.
Additional information
Input variables
To explain the concept of input variables it is useful to look at the definitions of the variable MAT_BEN_PP (maturity
benefit per policy).
Click Libraries in the accordion and double click Conventional to open the Conventional Library. A list of variables
in the library is displayed. To select the variable MAT_BEN_PP, just type the letters MAT in quick succession in the
list.
NOTE: If the variables are not displayed in alphabetical order in the Main Window you can click the Name column
to rearrange them. The columns in the List of Definitions pane can be expanded to show more or less of the
Indicator Expression for example.
In the case of the Conventional Library as shown below, you will see that there are two definitions.
In the case of the International library there are five definitions. The definition that is brought into a product depends
on the combination of indicators selected.
Your chosen combination of indicators brings in the formula definition SUM_ASSD_PP(t), that is the sum assured.
This is the default definition for a non-profit product. Once brought into the product it can be amended if required.
Variable naming convention

End characters Description
_PC Indicates that the variable takes values entered
as a percentage, so 3% would be entered as 3.
For example, VAL_INT_PC.
_M Indicates that the variable takes values entered
as months, so 3 years would be entered as 36.
For example, INIT_PER_M.
_Y Indicates that the variable takes values entered
as years. For example, POL_TERM_Y.
_PN Indicates that the variable takes values entered
as a proportion, for example from a mortality
table. For example, Q_EXP_PN.
_IF Indicates that the variable takes values entered
for in force business. For example, NO_POLS_
IF.
_PP Indicates that the variable takes values entered
as per policy amounts. For example, MAT_BEN_
PP.
Extended Lesson
General variables
These have a variable code beginning with A. Click the Code column so that the AGE_AT_ENTRY variable is at
the top of the list
To see the definition for the AGE_AT_ENTRY variable, select it in the list and double-click or click Open from the
Home Ribbon. A new window underneath the C_ENDT product has opened called AGE_AT_ENTRY. The Design
ribbon menu has appeared and the definition for the variable is displayed.
Accept this definition by clicking on the OK or Next icon. As part of this process Prophet checks the definition for any
syntax or similar errors.
SEX variable
This variable has a default definition of Model Point and can be accepted.
Extended Lesson 43
ENTRY_YEAR and ENTRY_MONTH variables

The next two variables, ENTRY_YEAR (year of entry) and ENTRY_MONTH (month of entry) have formula
definitions. There is no need to change these.
POL_TERM_Y variable
POL_TERM_Y (policy term in years) is defined as a Model Point.
ADD_TERM_M variable
Accept the default definition of zero for ADD_TERM_M (additional term in months).
ANN_PREM_PP variable
The default formula definition of ANN_PREM_PP (annual premium per policy) can be accepted. This formula would
need to be changed if the product had increasing premiums. You can accept the default Model Point definition for
ANNUAL_PREM (annual premium).
NOTE: You will often get pairs of variables structured like ANN_PREM_PP and ANNUAL_PREM. The variable
ANNUAL_PREM is normally given a model point definition that specifies the current or original premium whereas
ANN_PREM_PP is given a formula definition that can be used to specify how the premium varies over time.
PREM_PAYBL_M variable
The variable PREM_PAYBL_M (number of months premiums payable) should be defined as a Model Point. To do
this, open the variable, click Change Definition Type and you will see the following dialog:
Select Model Point and click OK. Notice how the icon shown for the open window for PREM_PAYPL_M has
changed to reflect this.
From to
Save the definition by clicking on Ok.
PREM_FREQ variable
PREM_FREQ (premium frequency) should also be defined as a Model Point.
SUM_ASSD_PP and SUM_ASSURED variables

Accept the default definitions for SUM_ASSD_PP (sum assured per policy) and SUM_ASSURED (sum assured).
SALES_FACTOR variable
This variable is a multiplier factor for future sales which is used for new business projections. Since the variable is
used by the tutorial product accept the default definition.
Benefits
The following variables relate to the benefits aspect of the tutorial product, these have a variable code beginning
with E.
DEATH_BEN_PP and MAT_BEN_PP variables

Accept the default definitions for DEATH_BEN_PP (death benefit per policy) and MAT_BEN_PP (maturity benefit
per policy) variables.
SURR_VAL_PP variable
The default definition for SURR_VAL_PP (surrender value per policy) needs to be amended to allow a surrender
value of half the premiums paid accrued with interest to be paid in the first two years.
Replace the lines:
IF t <= NIL_SURR_P_M THEN

0
Extended Lesson 45
With
IF t <= 23 THEN
(SURR_VAL_PP(t-1) + PREM_INC_PP(t) * 0.5) * (1 + SURR_INT_PC/100)^(1/12)
l Type the changes directly into the formula.
Instead of typing the name of the variable SURR_VAL_PP in full, you can type SUR and press F3 to list all the
variables that start with SUR. You then locate and select SURR_VAL_PP and click OK to enter it into the formula
definition.
The surrender value at the end of month t equals the surrender value at the end of month (t-1) plus half the premium
paid in month t, accrued with interest.
The variable t (time) runs in months from 0 immediately prior to the issue of the policy up to the end of the policy
term.
This formula introduces some of the syntax available for formulas as well as some "best practice" guidelines when
entering formulas using Prophet:
l t (time) is entered in lower case type.
l Although excess spaces in the formula are ignored, for readability you should indent the code below IF and
ELSE lines by two spaces.
If there are any syntax errors in the formula or if it contains any invalid variable names then Prophet will not accept
the definition. However, this formula includes a deliberate mistake in the logic so that later in the tutorial you can
see how Prophet handles such errors. Can you spot it now?
When you have amended the formula, click OK to accept the changes.
The list of input variables is then displayed.
SURR_NETPREM variable
In the list of variables, click on SURR_NETPREM (surrender net premium). You can see in the bottom pane that it
has a formula definition that references SURR_ZILLMER (surrender Zillmer). If you look at the list of variables, you
will see that the list does not include SURR_ZILLMER at the moment. However, if you now click Open to open the
variable SURR_NETPREM and click OK to accept its default definition, you will see that the variable SURR_
ZILLMER has been brought into the list of variables.
Prophet expands the list of variables as you accept definitions - this approach is adopted so that variables are not
brought into the product unnecessarily. For example, if you had wanted to change the definition of SURR_
NETPREM so that it did not use SURR_ZILLMER, that variable would have been needed in the product. These
variables (such as SURR_ZILMER in this example) are called Secondary Input variables.
SURR_INT_PC variable
l The interest rate at which the surrender value is calculated is 5%, so for the variable SURR_INT_PC (surrender
interest rate) click Open, type 5, delete the 0 and click OK.
It would be better to define SURR_INT_PC as a parameter definition but this allows you to practice amending a
constant definition in this tutorial.
Other variables
Select the default definitions for the following variables by opening the first one and then clicking on Next three
times:
SURR_ZILMER The surrender Zillmer.
SURR_ZILL_PC The surrender Zillmer percentage.
SURR_NP_R_PC A restriction on the surrender net premium as
percentage of the annual premium.
Reserving / Solvency / Accrual Methods

The following variables relate to the reserving and solvency aspects of the tutorial product, they have a variable
code beginning with F.
NET_PREMIUM
Accept the definition for NET_PREMIUM (valuation annual net premium) by clicking Next to accept it.
Extended Lesson 47
VAL_INT_PC variable
The VAL_INT_PC variable represents the interest rate at which the valuation reserves are calculated. Accept the
default definition of parameter by clicking Next, since this will allow a number of products to be run using different
interest rates.
Other variables
Accept each of the following variables by clicking Next:
VAL_ZILLMER The amount of valuation Zillmer
VAL_ZILL_PC The valuation Zillmer rate
NP_RESTRN_PC The restriction on valuation net premium as a
percentage of annual premium
VAL_SUM_ASSD The value of sum assured
VAL_NET_PREM The value of net premium
UNEARNRES_PP The unearned premium reserve per policy
(International Library only)
MIN_RES_PP The minimum reserve per policy
PE_DTHBEN_PP The period end death benefit exclusive of
terminal bonus and after declaration
SM_RES_PC The solvency margin as a percentage of reserve
SM_SAR_PC The solvency margin as a percentage of sum at
risk
Interest rates
These variables have a code beginning with G.
The following five variables represent the components of the investment return.
FII_PC Annual rate of franked investment income
UFII_PC Annual rate of unfranked investment income
RCG_CHG_PC Annual rate of chargeable realised capital gain
RCG_UNCHG_PC Annual rate of unchargeable realised capital
gain
UNRCG_PC Annual rate of unrealised capital gain
The actual values that should be entered will be discussed in Lesson 2 when you set up the model point files and
tables. The values of these variables (which are essentially interest rates) may change between groups of products.
For instance, non-profit and with-profit products will usually be backed by different mixes of assets. You will amend
these variables to refer to other variables which will read the appropriate values from the global file.
One way to do this would be to open each variable, click Change Definition Type and then select Formula, enter the
required variable name and click OK as with SURR_VAL_PP. However, this is not necessary since the required
formulas have already been set up as "alternative definitions". Alternative definitions are alternatives to the default
definitions and have been set up in the libraries for a number of variables where commonly used alternatives exist.
For the variable FII_PC, click Select Definition. The following dialog is displayed for the Conventional product (a
similar dialog is displayed for the International product):
Click on the line:
NON PROFIT BUSINESS6FormulaAlternative

Extended Lesson 49
and then click OK to accept this.
You will then see a formula which refers to the variable NP_FII_PC (non-profit franked income rate). Click OK to
accept this.
NP_FII_PC is now the next variable in the list. It has a global definition by default, which is what you require.
Repeat the process you have carried out for FII_PC for the other four components of investment return, always
selecting the "NON PROFIT BUSINESS" alternative definition.
DISC_A_PC variable
The variable, DISC_A_PC, is the discount rate which is applied to the stream of emerging profits. Accept the default
definition of Global by clicking Next. This allows it to be given the same value for all of the products in your model
office. There are two more discount rates, DISC_B_PC and DISC_C_PC. You should accept the default definition of
Global for each of these variables.
SOLV_INT_PC variable
The variable SOLV_INT_PC is the interest rate on the solvency margin and should be changed to a global
definition.
PER_TO_VAL_M variable
Accept the default definition of PER_TO_VAL_M (initial period to next valuation in months).
Tax
These variables have a variable code beginning with H.
For the tutorial product C_ENDT that uses the Conventional Library, accept the global definitions of each of the
following variables:
OTAX_FII_PC The office tax rate on franked investment income
OTAX_UFII_PC The office tax rate on unfranked investment
income
OTAX_RCHG_PC The office tax rate on realised chargeable gain
In addition, accept the following default definitions for the C_ENDT product.
OTAX_EXP_PC Office rate of tax relief on expenses
ACQ_EXP_TAX Acquisition expenses for tax purposes
IMM_EXP_REL Proportion of acquisition expenses for
immediate relief
ANN_EXP_REL Annualise expense relief 1 = Y, 0 = N
For the tutorial product I_ENDT that uses the International Library, accept the global definition for the OTAX_PROF_
PC variable.
Commission
The following variables relate to commissions they have a variable code beginning with I.
IC_PAYBL_PP variable
The first commission variable is IC_PAYBL_PP (initial commission payable per policy).
For the C_ENDT tutorial product accept the default definition (by opening and clicking on Ok).
For the I_ENDT tutorial product you need to amend the default definition as it currently spreads initial commission
payments over the first year, depending on the frequency of premium payments. One way to do this is to open the
variable and change the formula to make the commission payable on inception. A better option is to make use of an
"alternative definition". Click on Select Definition as before and in the Select Definition from Library dialog select the
line starting with "INDEMNITY COMMISSION PAID MTH1" and click OK. You will see that this is a formula that pays
all the initial commission in the first month. Click OK to accept the alternative definition.
IC_RATE_PC variable
You are now going to use the variable IC_RATE_PC to define the initial commission rate. The following formula
defines the percentage of annual premium that is paid as initial commission:
Extended Lesson 51
IF POL_TERM_Y <= 10 THEN

3 * POL_TERM_Y - 5
2 * POL_TERM_Y + 5
POL_TERM_Y + 20
ELSE
40
To enter the formula:
l Open the variable IC_RATE_PC and click Change Definition Type.
l Select Formula and type in the formula shown above. Note that you can use Cut, Copy and Paste in the same
way as in other Windows applications.
l After entering the formula, click Ok to accept it.
If there are any syntax errors in the formula then an error message with the probable location of the error is
displayed.
Note that this approach demonstrates how to use a formula to define initial commission rates. A formula is only
feasible if there is a pattern in the values. In Lesson 5 you will see how these values can be entered in a table that
can be read by the product.
IC_EARNL_PP variable
For the C_ENDT tutorial product accept the default definition.
For the I_ENDT tutorial product use the alternative definition for IC_EARNL_PP (initial commission earned on
lapses per policy).
To do this:
l Select the IC_EARNL_PP variable and choose Select Definition.
l Click on the line beginning with "EARNED UNIFORMLY OVER N MONTHS" and click Next.
Other variables
Accept the default definitions for the following variables:
IC_EARNL_PC The initial commission earnings rate for lapses.
Only applies to the International product.
IC_EARN_M The initial commission earnings period in
months. Only applies to the International product
IC_EARND_PP The initial commission earned on death per
policy
IC_RECOV_PC The percentage of initial commission recovered
on clawback
RC_PAYBL_PP The renewal commission payable per policy
RC_RATE_PC variable
Apply a parameter definition to the variable RC_RATE_PC (renewal commission rate).
RC_START_M variable
The default for the month in which renewal commission commences, RC_START_M, is 13. Since the renewal
commission starts in the first month of the second policy year, the value 13 is correct. You can therefore accept the
default definition.
Expenses
These variables have a code beginning with J and relate to the expenses aspect of the tutorial product.
INIT_EXP_PP variable
The next variable in the list is INIT_EXP_PP, the initial expense per policy. You will see that this is made up of three
components: a fixed per policy expense, a percentage of the sum assured and a percentage of the annual
premium.
Extended Lesson 53
To model this product you are just using a fixed per policy expense. You should accept the formula for INIT_EXP_
PP using Next.
IE_FIXED variable
For the IE_FIXED (fixed initial expenses) variable change its definition to a parameter type.
IE_SA_PC and IE_PREM_PC variables

The defaults for the percentage of sum assured expenses and the percentage of annual premium expenses are
both 0, so accept these for IE_SA_PC and IE_PREM_PC.
Note that you could have deleted the two lines that refer to these last two variables from the formula for INIT_EXP_
PP in which case you would not have had to define them as zero. This is a valid approach but it would make the
product less flexible if, in future, you want to allow for expenses as a percentage of sum assured or annual
premium.
REN_EXP_PP variable
The Conventional library formula for REN_EXP_PP (renewal expenses per policy) is:

ELSE
0
The International library formula for REN_EXP_PP is:

ELSE
0
By looking at the formulas for REN_EXP_PP you can see that the variable RE_START_M is the month in which
renewal expenses are first assumed to be incurred. This normally depends on how expenses are analysed in the
office. The formula indicates that renewal expenses are incurred in each month during the policy term in and after
this "start month". Their amount increases with inflation from the start of the projection period.
For the Conventional library definition accept the default definition for REN_EXP_PP.
For the International library formula note the following additional line:
This allows renewal expenses to be expressed as a percentage of the annual premium. As you are only assuming
fixed renewal expenses, you could delete this line from the formula. However, as described earlier for INIT_EXP_
PP, this would make your product less flexible. International library users should therefore also accept the default
definition of REN_EXP_PP.
RE_AP_PC variable
For the International library formula accept the default of zero for RE_AP_PC.
RE_START variable
Accept the default value of 2 for the variable RE_START_M.
RE_FIXED_Y variable
Define RE_FIXED_Y (fixed annual renewal expenses before inflation) as a parameter type.
RE_INFLAT_PC variable
Accept the default definition of RE_INFLAT_PC (annual renewal expenses inflation rate).
CPI_GTH_PC and RE_RESERV_PC variables

Accept the default definitions for CPI_GTH_PC (Consumer Price Index inflation rate) and RE_RESERV_PC
(renewal expense as percentage of reserve).
Mortality
The following variables have a variable code beginning with K and relate to the mortality aspect of the tutorial
product.
Extended Lesson 55
Q_EXP_PN variable
The next variable is Q_EXP_PN which specifies the mortality table used for the experience basis.
For the International product I_ENDT the mortality table GKM80 is used.
The location of the mortality tables is set when Prophet is first installed. For example:
C:\Documents and Settings\All Users\Application Data\SunGard\Prophet80\MORT. You can check this location in
Table Options from the Prophet Button.
To select a different table click on Browse, browse to the mortality table location as mentioned above and select the
relevant table. Note that although GKM80 is an ultimate table, the Select/Ultimate setting can be left unchanged as
Prophet will ignore this setting for an ultimate table.
PROP_EXPQ_PC variable
Amend PROP_EXPQ_PC, the percentage of the experience mortality rates, to be a parameter definition type.
Q_SURR_PN variable
The next variable is Q_SURR_PN which specifies the mortality table used for the experience basis.
PROP_SURQ_PC variable
Accept the default definition for PROP_SURQ_PC, the percentage of surrender mortality rates.
Q_VAL_PN variable
The next variable is Q_VAL_PN which specifies the mortality table used for the valuation mortality basis.
PROP_VALQ_PC
The percentage of the valuation mortality table used should be a parameter definition type, so you should amend
this accordingly.
Extended Lesson 57
Decrements
These variables have a variable code beginning with L.
The next variable is ANN_LAPSE_PC, which is the percentage of policies that lapse or surrender each year. You
will notice from the formula as it stands that you are allowed to enter different lapse rates in the first year; the second
year; and then after the second year. You want to amend the formula so that there are different lapse rates in the
first year; the second and third years; and after the third year. To do this, go to the following line:
If you change the 24 to 36, then the line YR2_LAPSE_PC * YR2_LAPSE_SY will apply during the second and the
third years. Click Next when you have made this change.
The following nine variables should have their default definitions accepted:
YR1_LAPSE_PC Lapse rate in first year
YR2_LAPSE_PC Lapse rate in second year
YR3_LAPSE_PC Lapse rate in third and subsequent years
SKEW_FACTOR Lapse and paid-up policy skewness factor
LAPSE_TIMING Lapse timing
YR1_LAPSE_SY Year 1 lapse rate sensitivity
YR2_LAPSE_SY Year 2 lapse rate sensitivity
YR3_LAPSE_SY Year 3 and subsequent lapse rate sensitivity
ANN_MAT_PC Annual maturity rate
Initial values
These variables have a variable code beginning with N
DURATIONIF_M
Duration in force in months should have its default definition accepted.
INIT_POLS_IF
Initial number of policies in force should be given a Model Point definition.
Extended Lesson 59
Saving the product

Click OK and the list of input variables you have defined will be displayed. Click Save to save all the variables and
definitions for the product. You might get a warning like this:
This means you did not accept all the variables. Do not click OK because the default definitions will then be used for
all these variables. Instead click Cancel to return to the list of input variables. You can then locate the variables
which still have a status of "Not Defined" by clicking on the Status column header so that they all appear at the end
of the list of input variables.
When you have accepted all the variables, click Save.
You should then see the following dialog:
Click OK to save the product.

61
L E S S O N 2
Setting up model point files and tables
In this lesson you are going to set up model point, parameter and global files for the product you specified in the
previous lesson.
Introduction 62

62 Lesson 2 Setting up model point files and tables
Introduction
Model point files contain the policy data that is used as a starting point for Prophet's calculations. Each model point
can represent an individual policy or a group of policies. In the latter case each model point contains values that
overall represent a tranche of business. Model point files are normally set up using either the Table Editor in
Prophet or the Data Conversion System.
Parameter files contain values for all variables where the same value applies across all the model points of each
product, but for which different values can apply to different products. A good example would be lapse rates, where
different types of product may have different lapse profiles.
Global files contain values for variables where the same value applies across all products and model points in your
model office. A typical example would be the risk discount rate, which you would want to keep the same over the
whole company.
For more information about tables refer to Chapter 5 of the User's Guide.
In this and subsequent lessons, when a product name is to be entered, or a library selected, International library
users should replace "C_ENDT" with "I_ENDT" and "C Conventional" with "I International".
Setting up a structure
Before you set up any tables you should create a structure. You do this by clicking on New in the Edit section of the
Home ribbon, then selecting New Structure.
The Structure dialog is then displayed with the Products/Accumulations tab displayed as follows:
Enter the Name as Tutorial Structure at the top of the dialog.

The Products list contains the products which are to be included in the structure. To add products to a structure you
click Select Products above the Products list. The Select Products dialog is displayed:
On the left a list of all the products which can be selected is displayed. The list on the right will show which products
you have selected for this structure. Select C_ENDT (or I_ENDT ) and double click or use to select it.
To add the product to the Products List of the Structure click OK.
The Accumulations list contains any accumulations that are specified. Accumulations allow results from one or
more products to be aggregated together. This aspect is covered in the Prophet Model Office Tutorial and therefore
you can ignore this aspect at this stage.
In addition, options on the Configuration tab can be left at their default settings and so can be ignored at this stage.
Saving the structure

In the Structure dialog click OK to save it.
Setting up the model point file

You need to create a model point file for the product in this tutorial so from the New button click New Model Point to
display the New Table dialog.
Note that the model point file is automatically given a file extension of .rpt. The location of the file can be amended if
required, but the file name must correspond to the name of the product that will be using it.
In the Table Name text box, using the default table location, you enter the name of the model point file.
If you are using the Conventional library, replace model1.rpt with C_ENDT.RPT taking care not to press the Enter
key after entering the name.
Alternatively, if you are using the International library, replace model1.rpt with I_ENDT.RPT taking care not to
press the Enter key after entering the name.
For the Conventional product the New Table then appears as:
To fill the columns with the names of the variables from a product click Initialise.
For the Conventional product the dialog appears as:

For the Conventional product, select C_ENDT or for International product select I_ENDT.
Click OK to open the Table Editor containing the empty model point file. All the variables you defined as model
points in your product are listed across the top as you can see in the screen below.
Note that a new Table ribbon has appeared; this contains many of the commands needed to deal with tables.
Model Point File properties

Now click on Table Properties to display the following dialog:
Enter a suitable description in the Description field (for example Tutorial Model Point File) and click OK.
Sub-product codes
The first column in the table is headed SPCODE. This is the sub-product code and is used by Prophet when it
accumulates the results. Prophet will automatically sum the results for all of the model points with the same
SPCODE. This could be used for example to make a distinction between the different ways your business is
obtained, for example through direct writing and brokers. For model office work you will normally set SPCODE to a
number between 1 and 50 for in-force business, and to a number between 51 and 9999 for new business. The
model points must be entered in ascending order of SPCODE in the model point file.
You are just going to run one model point through the product in this part of the tutorial, and as it will be an in-force
policy, enter 1 as the SPCODE for your model point.
Values
The values of some variables have fixed ranges. For example, the variable SEX can only take the value of 0 (for
male) or 1 (for female). In such cases you can choose whether to display the values or their descriptions.
Note that the descriptions are specified for a variable using the Variable Constraint feature. This feature allows you
to specify a description for each value that the variable can have. For more information see Variable Constraints in
the Prophet User's Guide or in Help.
Since values will be entered instead of descriptions click the button so that they can be entered.
Enter the values for the following variables:
AGE_AT_ENTRY This is the policyholder's age at the start of the
policy. Set it equal to 30.
SEX Select Male.
POL_TERM_Y This is the policy term in years. It should be set
equal to 10.
ANNUAL_PREM This is the annualised premium payable. It
should be set equal to 840.
PREM_PAYBL_M This should be set equal to the policy term
multiplied by 12 so enter 120.
This is not really the recommended way, it is
better to define it as a formula in the product
instead of a model point.
PREM_FREQ This is how frequently the premium is payable.
Select Monthly.
SUM_ASSURED This is the basic sum assured. It should be set
equal to 10000.
DURATIONIF_M This is the duration of time in months that the
policy has been in force. If premiums are paid
monthly, then it will be the same as the number
of premiums which have been collected. You will
assume that the contract was taken out on 1
June 2010, and so 7 months have elapsed since
the contract was taken out. Therefore this
variable should be entered as 7.
INIT_POLS_IF This is the initial number of policies in force. This
If you click on the Names/Descriptions button and select both for variables you can see the descriptions for the
variables
Saving the file

Click Save and then click OK to accept the file name and location.
Click Close Table.

Setting up a parameter file

Parameter files are two dimensional tables which contain constant values indexed by product name and variable
name.
The example used in this tutorial does not really emphasise the advantages of using parameter files because you
currently have only one product. In practice you would normally have more than one product and so parameter files
would be used for variables whose values change across products.
Creating the parameter file

While your cursor is in the Tree click New and select New Table. The following dialog then appears:
Choose Parameter and then click Initialise.
The Select Product dialog is displayed which allows you to select one or more products so that the file can be set
up with the names of the variables with a parameter definition in those products.
For a Conventional Library product the dialog appears as:

Select your product and click OK.
Values
You will be presented with an empty parameter file with all the variables you defined as parameters in your product
across the top. You can now enter the values for these variables.
IE_FIXED This is the fixed initial expenses and should be
set equal to 160.
PROP_EXPQ_PC This is the percentage of the mortality table used
for the experience that you wish to use. It should
be set equal to 85.
PROP_VALQ_PC This is the percentage of the valuation mortality
table that you wish to use. It should be set equal
to 100.
RC_RATE_PC This is the renewal commission rate and should
be set equal to 3.
RE_FIXED_Y This is the current rate of fixed renewal expenses
and should be set equal to 24.
VAL_INT_PC This is the valuation interest rate used for

calculating the mathematical reserves. This
YR1_LAPSE_PC This is the lapse rate assumed to apply for the
first policy year. It should be set equal to 10.
YR2_LAPSE_PC This is the lapse rate for the second and third
policy years and should be set equal to 7.5.
YR3_LAPSE_PC This is the lapse rate for the remaining duration of
the policy and should be set equal to 3.
Saving the file

Click Table Properties and enter the description Tutorial Parameter File. Then click OK followed by Save and the
following dialog will be displayed:
Change the File Name to PARAMET.FAC and click OK.
Click Close Table.

Setting up a global file

Global files are two dimensional tables that contain constant values indexed by variable name and by run number.
Setting up properties
To create the Global File, click New and select New Table then select Global in the pop up box and click OK. The
Properties dialog is then displayed:
Enter a description such as Tutorial Global File and type 1 in the Run Numbers box and click OK.
To include the variables with global definitions for your product, click Add Variables in the Update section. Then
select your product and click OK.
Table worksheet
Conventional library users will be presented with the following screen (for the International business product there
will only be one tax variable in the first column):
You will notice that the table contains one column headed RUN_01.
It is possible to perform multiple sensitivity runs by entering the global values to be used in these runs into further
columns headed RUN_02, RUN_03 and so on.
Values
You can now enter the following values for the variables:
CPI_GTH_PC This is the annual Consumer Price Index
inflation rate and should be set equal to 4.
DISC_A_PC This is the discount rate that is applied to the
stream of emerging profits. It should be set equal
to 8.
DISC_B_PC This is the discount rate that is applied to the
to 6.
DISC_C_PC This is the discount rate that is applied to the
to 10.
NP_FII_PC This is the annual percentage rate of franked
investment income earned on the investments.
As explained in Lesson 1 this contract is 75%
backed with equities which provide franked
investment income. These yield an average of
3% so 2.25 (that is 0.75*3) should be entered
here.
NP_RCGCHG_PC This is the annual percentage rate of realised
chargeable gains and 0 should be entered here.
This is because the average growth rate of
equities (4%) is the same as the inflation rate
(4%) so it is reasonable to assume that all
realised gains will be relieved against
indexation allowances.
NP_RCGUNC_PC This is the annual percentage rate of realised
unchargeable gains. As you are assuming that
15% of equities are realised each year, 0.45
(that is 0.75*4*0.15) should be entered here.
NP_UFII_PC This is the annual percentage rate of unfranked
investment income earned on the investments.
This contract is 25% backed with fixed interest
government stocks which provide unfranked
investment income. On average these earn 5%
so 1.25 (that is 0.25 * 5) should be entered here.
NP_UNRCG_PC This is the annual percentage rate of unrealised
gains. 2.55 (that is 0.75 * 4 * 0.85) should be
entered here.
You should note that the sum of the above five components of investment return equal to 6.5%. This is equal to
(0.75 * 7 + 0.25 * 5), the overall return specified in Lesson 1.
For the Conventional library product, the following tax values need to be entered:
OTAX_FII_PC This is the annual percentage tax rate on franked
investment income and should be set equal to
20.
OTAX_RCHG_PC This is the annual percentage tax rate on realised
chargeable gains and should be set equal to 25.
OTAX_UFII_PC This is the annual percentage tax rate on
unfranked investment income and should be set
equal to 25.
For the International library product only one tax value needs to be entered:
OTAX_PROF_PC This is the annual percentage tax rate on profits
and should be set equal to 33.
For both products the following value needs to be entered:
SOLV_INT_PC This is the interest rate on the solvency margin. It
Saving the file

Click Save to save the table. Accept the default location and change the name to GLOBAL.FAC. Click OK and
close the table.
Making changes
Further columns and rows can be added to your tables, as required. It is also possible to make use of the Table
Editor formulas to add or copy data, rather than entering individual values. For more details, refer to the "Setting up
tables" chapter in the User's Guide.
77
L E S S O N 3
Setting up, running and reporting on a product
Now that you have created a product, its related model point, parameter and global files and a structure in the
previous two lessons, you are ready to set up a run, run the product and view the results of the run.

78 Lesson 3 Setting up, running and reporting on a product
Setting up a run setting

Setting up a run involves specifying a structure and a run setting. Structures contain information about what you
want to run and run settings contain information about how you want to run it. You can set up and maintain a
number of different structures and run settings so that you switch between them rather than amending them. You
have already set up a structure, so you now need to create a run setting.
With your cursor in the tree, Click New then Run Setting. Select the "Calculation Run" option and then click OK to
display the following dialog:
Enter a name of Tutorial Run Setting in the Name field at the top of the dialog. Then complete each of the items in
the tabs as described in the following sections.
Run Parameters tab

This tab allows you to specify the Start Date and the Future and Past Accumulation Periods.
The Start Date is used to specify the start date of the model office projection. The projection for the current run is to
be based at 31 December 2010 so the date should be changed to 31 December 2010.
The Future Accumulation Period is the number of years of projected results that will be included in the results files
produced by Prophet. The actual calculations are always made from the start of the policy until at least the end of
the policy term, to ensure that items such as the discounted value of future profits are properly calculated.
You are projecting in-force policies with a ten year policy term and wish to be able to view the results of all the
calculations, so enter 10. If you were also projecting new business policies, you would enter 11, rather than 10,
because for a 10 year policy, the maturity proceeds are paid out in the 1st month of the 11th year. Thus, if the policy
was issued in June 2010 the proceeds are paid out in June 2020
The Past Accumulation Period is the number of years of results prior to the start date of the projection that will be
included in the results files produced by Prophet. It primarily enables you to produce output for checking historic
asset share calculations. Leave the default value for the Past Accumulation Period unchanged (i.e. 0).
Month in which Company Year Ends is used to ensure that reporting by company year is handled correctly within
Prophet. The default of 12 should be accepted.
The other sections in this tab are not needed in the run, so you can leave them as they are. They are covered in the
Model Office Tutorial.
Advanced options
Additional options are available when you click Advanced in the Advanced area of the Run Parameters tab. The
Advanced Settings dialog is displayed similar to the following:
The dialog has 2 tabs:
l Run Process tab

Contains options that specify:
l The order in which products are run
l The seed values to be used for stochastic runs
l File creation and deletion
l Results retention
l Batch Programs tab

This has options that allow additional programs to be specified that can be run at specific points in a run.
For the tutorial accept the default settings. Click Cancel to return to the Run Parameters tab.
Tables tab
Click on the Tables tab of the Run Setting. The Tables tab appears similar to the following:
Settings from this tab allow you to specify:
l The location in which the model point files for the structure are held and their file extension.
l The locations and names of the global, parameter and prices files.
l The location of any other tables.
l The location and name of the sales file which contains assumptions about future new business volumes.
Unless you specify the complete location including the drive letter or UNC path, any location you enter is taken
relative to the workspace location.
The default location for the model point files is MPFILES, which means that, if you have installed the tutorial on the
C: drive and in the location Prophet_Tutorial, then the model point files will be read from C:\Prophet_
Tutorial\MPFILES. The default location for all the other files is the TABLES location and is handled similarly.
The tutorial will use the default locations and names. As you will not be using a unit prices file or a sales file you
should ensure that these entries are blank.
Results tab
This tab enables you to specify what kind of output is to be generated in the run and the format(s) in which it is to be
produced. It appears as follows:
Results Files
These options allow you to choose the type of results files that will be produced in Prophet's own results file format:
Item Description
Projection / NB Profile These results contain projected results for each
month of the future and past accumulation
periods.
Valuation These results contain the values calculated at the
start of the projection period split by maturity year
or current age.
Accumulation Results This option produces and retains the results
generated by accumulations.
Intermediate Dynamic This option produces and retains the
intermediate results generated in dynamic runs.
Select Projection/NB Profile.
Product Total Results Files (00)

Options in this area allow you to specify which Product Total Results files can be suppressed. This can improve run
times and reduce unnecessary disk space as unwanted results files are not created.
Accept the default setting to create results files for both sub-product codes and product totals.
Variables in Results Files

This option allows you to choose the variables to be retained in the results. Variables which are defined as or
evaluate to constant values are always included in the results files. This includes all variables defined using either
global or parameter definitions. In addition, the values for the first model point of each sub-product code are
included for all variables defined as model point. You can choose one of the following options:
Item Description
Selected Results are generated containing values for the
variables in a selected variable group. You
select the variable group by clicking Variable
Group and then selecting the group from a
category.
Cumulative Results will be generated which contain values
for all the variables which have had their
cumulative property checked. This will normally
be all variables for which it makes sense to sum
values across model points. If a variable’s
cumulative property is checked, its values will
also be aggregated across products if
accumulations are being used.
All Results will be generated that contain values for
all the variables in the product. This is most
useful when you are developing products and
testing that they do the calculations you require.
Select All so that you can inspect the values of all the variables in your product.
Text Results Files

These are basically the same as Results Files, except that the results are in a text format instead of in Prophet's own
results format. These results can be used in other applications.
Do not select any Text Results files.
Individual Model Point Results Files

This option allows you to specify whether output files are to be generated which contain a line of results for each
model point. If selected, individual model point results will be produced in Prophet’s model point file format.
These files will contain the values at the projection start date (that is at t = DUR_M) for each of the variables in the
Variable Group specified. For more information on Variable Groups see the Specifying Variable Groups and
Categories section in part 4 of the User Guide
For the tutorial do not choose this option.
Error Control
This option allows you to specify the maximum number of errors allowed before Prophet terminates the calculations
for a particular product and the maximum number of warnings before termination of an accumulation. The default is
zero which means that the calculations for a product will be terminated if or when the first error occurs. If you enter
10, a product will only be terminated when the 11th error occurs. If you select the No Limit options, Prophet will
continue the calculations irrespective of the number of errors that occur.
The model point file you are using for this product contains only one model point so you will only want results if no
errors occur. Accept the default entries of zero for both fields.
Stochastic
Options in this area relate to stochastic runs and are only available if Stochastic is selected in the Run Setting. In
this tutorial the product is not being run either dynamically or stochastically so the Dynamic and Stochastic options
are not selected.
Runtime Configuration tab
The settings in the Runtime Configuration tab enable you to specify the type of run and how it is to be split among
other PCs when Parallel PC mode is used. The Runtime Configuration tab setting appears as follows:
For the tutorial accept the default settings.
Saving the run setting

Click on OK to save the run setting. From the Accordion select Structures and Run Settings and select the run
setting you have just created.
Running the product

Whilst the newly created structure or run setting is highlighted in the tree, click on the Run icon in the Run section of
the Home Ribbon. The dialog below should open.
Click OK.
Prophet first carries out various checks such as ensuring that all the model point files exist for the products included
in the run and that the global and parameter files specified in the structure exist. If not, a warning will be produced.
Next, a dialog with Runtime Performance Hints may pop up. If so, click OK.
This starts the Run Monitor which appears as follows:

As the run proceeds Prophet does the following:
l It recognises that you are running a new product and carries out the variable sequencing, code generation and
compiling processes needed to generate an executable program.
l It carries out the calculations for the model points and creates a file of the sub-product results for the required
variables over the specified period of accumulation.
l The run messages which appear on the screen to show how the run is progressing are also written to a run log
file.
However, in this case, Prophet will fail to complete step 2 because of the error you introduced (deliberately) when
setting up the product. The following dialog is displayed:
Identifying why a run has failed

When the previous dialog is displayed, the run log can be viewed by clicking Run Log. To view the run log at any
other time, open it from the Results & Runlogs tree or list. This will open the Results Viewer as shown below:
Click View to open the runlog
If you select the top line in the left hand panel (C:\Prophet_Tutorial\results\RUN_01) you can see there are 2 errors
in Execution.
If you select Execution in the left tree you will see the error below
This error is an indication that an invalid time period has been referred to.
To look at and correct the variable in question, close the Run Monitor and Results Viewer open C_ENDT (or I_
ENDT) from the Products tree, the product variables will then be displayed in the C_ENDT Preview window. Go to
SURR_VAL_PP (code ED10).
Taking a look at SURR_VAL_PP, you can see that the first part of the formula refers to itself at time (t-1). It is a
"recursive" formula which is necessarily evaluated by starting at t = 0 and moving forward one month at a time.
However, at time period 0 (when the error occurred) this formula will reference the value at t = -1. As t can only take
positive values, this term has caused the error. This can be rectified by opening the variable and replacing the first
line with:
IF t = 0 THEN
0
Click Ok and then save your product. The product can now be re-run by clicking on Run.
Look at the run log again after the run is complete (by clicking on Run Log from the Run Monitor or by double
clicking on RunlogSummary.xml under the results section). You should see that there are now no errors.
You can now close the run log window.

Viewing results produced in a run

The run has been completed and the results stored on the hard disk.
Run Number should be 1, because this is the only run number you have run so far.
Sub-Product gives a choice between Total Business(00) and Existing Business(01). Select Existing Business.
Results Type can be used to choose which type of results you want to view:
l Projection
l New Business Profile
l Valuation - Maturity Year
l Valuation - Current Age
l Unit Numbers
Select the Projection option.
Double click on C_ENDT01.projection (or I_ENDT01.projection) in the tree and the following screen will be
displayed:
At the top left you see the Run Number, the Sub-Product and Type that you selected together with the name of your
product. If you want to change one of these selections, just use the appropriate drop down list and make a
selection. The results on the screen will change straight away.
Variable Groups
In the Variable Group section there are Category and Name options. Using the drop down list next to Category you
will see a number of variable group categories and two additional options. The two additional options allow you to
select All Variables or Cumulative Variables.
Each variable group category contains a number of variable groups which allow you to report on a particular aspect
of the results. The standard workspace includes a number of variable groups which are listed in the Name drop
down list. If you select a variable group category the drop down list next to Name is opened so you can select the
required one.
If you want to create a new variable group or to change an existing one, you can do this by selecting the Variable
Groups option in the Workspace menu.
Conventional library users should select the A10 - Revenue Account / Profit Test variable group and International
library users should select A11 - International Rev Acct / Profit Test.
Time Periods
To specify the Time Periods for which the results are displayed, click on the Time Periods button. The following
dialog will then be displayed:
Start Position allows you to display the results from the start of the results or from a specified start year.
Format allows you to display the results in Company Year or Policy Year format:
Company Year displays the time periods in the form Dec 2010, 4Q2010, 2H2010, 2010 and 2010-2014. It is more
appropriate when you are using Prophet for model office work.
Policy Year displays the time periods in the form M12, Q4, H2, Y1, Y1-Y5. It is more appropriate for product
development work.
You can choose to display your results Monthly, Quarterly, Half-Yearly, Annually and/or 5-Yearly for a specified
number of years. If, for example, you choose 2 for monthly, then monthly values will be displayed for 2 years. You
can also choose to display a summary of the results for each year by checking the Show Annual Summary box.
Complete the Time Periods dialog as follows:

Item Do this
Start Position Select Start of Results
Format Select Company Year
Number of Years Enter 1 in Monthly
Show Annual Summary Select
To End of Results Select Annually
Then click OK.
Results
The remaining body of the results window displays the results. It is divided into three tabbed sections:
l Values (for time-dependent variables)
l Constants (and other non time-dependent variables)
l Audit information
You can change the format for the display of the results using the options on the right-click menu.
You can also choose to display either the variables or the time periods as the columns. To switch between them
click on the Swap button in the corner of the grid of values. For the tutorial, set the display so that the variables are
in columns and the time periods are in rows.
Copying Results
If you want to copy results, for example to Microsoft Excel or Word, you can use Copy in the clipboard section of the
Home ribbon to copy a selected range of cells or use the right-click option Copy Grid to copy the entire grid of
values including the top and left borders to the Windows clipboard. The right-click option Copy to Excel copies the
entire grid to Excel.
Printing Results
If you want to print the results, there is a Print option available via the Prophet Button. Clicking this should display
the following dialog:
Select the "Grid Values", "Constant Values" and "Audit Information" options and then click OK to print the results.
You can compare the printed results with those at the end of the tutorial.
97
L E S S O N 4
Reporting on dependencies in Diagram View
This lesson describes the main approach that you should adopt to check the calculations and, if required, to modify
them.
Introduction 98

98 Lesson 4 Reporting on dependencies in Diagram View
Introduction
Diagram view allows you to view all the variables and formulas in a product, the dependencies between the
variables and their values.
You will use it to:
l Check some of the variable dependencies in the product.
l See how some of the changes you need to make to the product should be implemented.
The Diagram View window

To load Diagram view, whilst highlighting C_ENDT01.projection in the Results and Runlogs part of the tree either
right click to open in Results Diagram View or from the open button choose Results Diagram. Once opened the
Diagram Ribbon is displayed.
The Diagram view window will then be displayed as follows:
The screen is divided horizontally into three sections:
l Variable dependencies
l Variable definition
l Results values
You can adjust the size of any pane by dragging its borders.
Variable dependencies
The centre pane of the top section shows the direct relationships between the current variable (MATH_RES_IF) and
other variables in the product. Clicking on any variable in this pane will make that variable the current one. The
current variable is also displayed in the second drop-down menu in the Diagram Ribbon at the top of the screen.
You can make any variable in the product the current one by selecting it in the Variable drop-down menu. If you
type in the first few letters of its name in quick succession, the first variable starting with those letters will be
highlighted.
The left hand pane of the top section enables a tree view to be displayed of the variables on which the current
variable depends. Any variable with a plus sign next to it may be clicked to expand the tree.
The right hand pane of the top section enables a tree view to be displayed of the variables that depend on the
current variable. Any variable with a plus sign next to it may be clicked to expand the tree.
Variable definition
The middle section displays the name, description, type, variable code and definition of the current variable. For
non time-dependent variables the value is also displayed in this section. In the case of model point variables and
other non time-dependent variables that have values that vary from model point to model point the value for the first
model point of the current sub-product is displayed.
If you move the mouse pointer over any variable in the middle section, Diagram view will display information about
that variable instead of the current one.
Results values
The three panes in the bottom section show the values of time-dependent variables in your product. The centre
pane shows the values of the current variable. The left pane shows the values of the variables on which the current
variable depends. The right pane shows the values of the variables that depend on the current variable.
Options
There are a number of options in Diagram view which enable you to change the way in which the information is
displayed:
If you select Font, Number or Time Periods in the Format menu you are able to change the font, number format and
time periods used to display the results.
If you select Suppress Zeros in the Format menu you are able to suppress variables which have zero values.
If you select Diagram Options in the Options on the Prophet Button you can specify which types of variables are
highlighted and in which colours. You can remove the side panels in the top section by un-ticking Show
Dependency Tree Views. You can also specify whether the three results panes should be synchronised or whether
you can scroll each one independently.
You can move backwards and forwards through a history of the variables that you have selected as the current
variable using the Back and Forward buttons on the Diagram section of the Diagram Ribbon.
You can change the product and the results which are displayed using the drop down list boxes in the Diagram
Ribbon.
You should now spend some time moving through the variables in the product you have created, exploring the
dependencies between them, and using some of the options available to you.
Using Diagram view to identify how to change the product

In the next lesson you will make the following enhancements to the tutorial product:
Valuation Interest Rate - you will amend the product to use different valuation interest rates depending on the
valuation series to which each model point belongs.
Mortality Experience - you will use the variable SEX to assign different mortality rates to males and females.
Diagram view can help you clarify exactly which variables should be changed to make these two enhancements.
Valuation interest rate

The valuation interest rate is represented by the variable VAL_INT_PC. In Diagram view use the Variable drop
down menu to make VAL_INT_PC the current variable. Looking at its dependencies, you can see that it is used
only in the variable M_VAL_INT, which in turn is only used in the valuation commutation functions. You will change
VAL_INT_PC to use a different valuation interest rate depending on the valuation series. This will be done in the
next lesson by creating a new variable VALN_SERIES to determine which valuation interest rate is used.
Mortality experience
You wish to change the experience mortality to depend on sex. We will use the tree to identify the correct variable.
On the tree expand the details under the product by clicking on the cross to the left of C_ENDT
This will expand the product to show that it is a product created from the Conventional library. The Model Point Files
associated with the product, the Indicators, the Variable definitions and the Results can then be expanded.
Expand Input Variable Definitions, this gives you the full list of input variables in the product.
Right-click on Input Variable Definitions and choose Group by Variable Main Category.
You will see that the definitions are grouped by category similarly to when we were defining the variables, expand
the section headed K-Mortality.
Referring to the product listing you produced earlier, you will see the input variables for mortality in the section
headed K-Mortality. The tree then looks as shown below.
If you hover over the variables in this category, the tool tip for Q_EXP_PN is Experience Mortality Rates; this is the
variable we want to change.
In results diagram view select Q_EXP_PN. You can see that the mortality rates on the experience basis are only
used in the variable Q_EXP. This means that amending Q_EXP_PN will have no wider, unintended effects.
There are already variables set up in the library to distinguish between male and female mortality experience.
These are:
Q_EXP_MALE KA11
Q_EXP_FEMALE KA12
The best way to make the change is to define Q_EXP_PN as a formula which picks out the correct mortality table
dependent on the policyholder's sex using these two variables. This will be done in the next lesson.
Click Close to close Diagram view.

105
L E S S O N 5
Updating libraries and products
This lesson explains how you can extend the calculations in Prophet to meet your particular requirements by
implementing the changes outlined in the previous lesson.

106 Lesson 5 Updating libraries and products
Adding a new variable to the library

You are now going to add a new variable VALN_SERIES to the library. From the tree, double-click on the library
that is shown expanded under the product. This will open the Conventional or International library as appropriate.
The screen will look like this:
Since you want to create a new variable, choose New Variable from New on the Edit section of the Home ribbon.
The Variable Properties dialog will then be displayed:

Enter the name as VALN_SERIES. Then enter the description as Valuation Series. Leave the Type as Number.
The other items in the Variables Properties dialog are described in the following sections.
Workspace level properties

Accounting type
l Revenue Account means that annual values for this variable will be the sum of the twelve monthly values (for
example Premium Income).
l Balance Sheet means the annual values for this variable will be the values in the last month of the year (for
example Mathematical Reserve In Force).
Select Balance Sheet.

Default printed decimal places

The normal Prophet convention is to use two decimal places for monetary values and six decimal places for
actuarial functions, interest rates etc. Enter 0 here, as decimal places are not needed for this variable.
Constraints
You can specify the values that a variable can have by setting up a constraint condition in the Constraints section of
the Variable Properties dialog. The constraint that you specify is then used to validate the values that you enter for
the variable in the Table Editor.
The constraints that can be specified for the variable can be one of the following:
l Specified values constraint

This type of constraint allows you to specify the values that the variable can have, together with descriptions for
each such value.
l Min / max / integer constraint

This type of constraint allows you to specify the minimum and maximum values that the variable can have, and
also whether it can only have integer values.
A description of the type of constraint applied to a variable is listed in the Constraints section of the Variable
Properties dialog.
Leave this entry blank as we will not be applying any constraints to the variable. Also, as the remaining workspace
level properties are beyond the scope of this tutorial you should not select any of them.
Library level properties

Type allows you to choose between Input and Core variables.
l Input variables are used to define the specific calculations you want to make for each of your products. When
you specify a new product, Prophet presents you with a list of input variables to be defined, based on the
indicators you select.
l Core variables contain the calculations which do not vary by product. Prophet automatically includes the
appropriate core variables with their appropriate definition, based on the indicators you select for that product.
Select Input for this variable.

Variable Code is a four character code which controls the order in which the input variables are presented to you
when setting up a product. It consists of two letters followed by two digits. Any number of variables can be given the
same variable code but it is better to give them different codes so that they appear in the order you want. The
natural place for VALN_SERIES to appear would be just after VAL_INT_PC (the valuation interest rate). If you click
Browse and search through the variables you will see that the variable code for VAL_INT_PC is FA10. Thus you
should give VALN_SERIES a variable code of FA11. This can be done by double clicking on VAL_INT_PC. You will
then be returned to the Variable Properties dialog where you see that FA11 has been entered for the variable code.
Below the variable code you will also see the descriptions for the F and FA variable categories.
Variable definitions
You should now click OK to close the variable properties and move to the variable definitions window where you
can create and amend the definitions that already exist for the variable and change it or create a new one. In this
case the list is empty since you have just created a new variable. From the object ribbon or the right-click menu you
should create a new definition for this new variable.
First you have to select the type of definition you want to create. This is done in the following dialog:
Choose Model Point and click OK.
You should now see a screen which looks similar to the variable screen you saw when specifying the product. The
difference is the bottom part of the screen headed Indicator Expression. Here you can specify the indicator or the
specific combination of indicators that would bring this variable into a product. More about this topic can be found in
the "Libraries" chapter of the Prophet User’s Guide. In this case you do not want to use this option so just click Ok
on the Variable section of the Design ribbon. This means that the variable will only be brought into the product
when it is referred to by another input variable.
You are returned to the definitions window but instead of it being empty you can see the definition you have
created, which means that you have finished creating the variable. The next step is to change your product to use
this variable. Close the library window.
Updating the product

You are now ready to amend the product to allow for the two changes which were described in Lesson 4. You will
also create a table of initial commission rates and amend the product to read values from this table rather than
using the existing formula.
Mortality experience
To open the product, double click on it. The following dialog is displayed:
You should normally select Yes when this dialog is displayed. Prophet will then scan all the input variables in the
library to check if any need to be added or removed from the product. This ensures that your product reflects the
changes you have made to variables in the library. In this case clicking Yes or No has the same effect since your
new variable has a blank indicator expression and hence will not be brought into the product until it is referred to by
another variable. However, click Yes anyway. When the list of variables appears, make sure they are listed in code
order. If not, click the Code column heading.
Select Q_EXP_PN, the definition could be opened by double clicking or clicking on Open.
However, you can also edit the product using Diagram view. Therefore click on the Diagram icon in the List View
section of the Home Ribbon.
Open the variable Q_EXP_PN either by clicking Open Variable or double clicking in the main diagram pane. Click
on Change Definition Type and select Formula.
The formula which you should enter here is:
IF SEX = 0 THEN
Q_EXP_MALE
ELSE IF SEX = 1 THEN
Q_EXP_FEMALE
ELSE
ERROR("Invalid value entered for variable SEX")
The ERROR function in the last line of this formula will cause the run to terminate if an invalid value has been
entered for the variable SEX (and if the run has been set up to fail at the first error). The text inside the quotation
marks will appear in the run log. Note that there is a similar function called WARNING. This function allows the run
to continue but produces a warning message in the run log.
Type in the above formula and click Next to accept it. You are now presented with the default definition for Q_EXP_
MALE. Accept this definition by clicking Next and move to Q_EXP_FEMALE. Accept this definition and return to
diagram view by clicking on Next and then Ok the next variable.
International library users should accept Q_EXP_MALE and Q_EXP_FEMALE.
The dependencies view for Q_EXP_PN will have been updated to show the new dependencies as follows:
Using the new formula, both male and female mortality tables are loaded into memory at the start of a run and the
appropriate values (based on age at entry) are then read into the Q_EXP_MALE and Q_EXP_FEMALE variables.
However, only one of these variables will be used as the experience mortality for any one model point, depending
on the value of the variable SEX.
You will now enhance the formula for Q_EXP_PN to demonstrate the use of the function READ_MORT_TABLE. It
uses only one variable (SEX) rather than three (SEX, Q_EXP_MALE and Q_EXP_FEMALE). The function READ_
MORT_TABLE has the same parameters as those that must be specified if a variable is defined as a mortality table.
These are the name of the mortality table, the age at entry variable, select or ultimate setting and age rating. The
formula which should be entered for Q_EXP_PN is:
IF SEX = 0 THEN
READ_MORT_TABLE("AM92", AGE_AT_ENTRY, "S", 0)
ELSE IF SEX = 1 THEN
READ_MORT_TABLE("AF92", AGE_AT_ENTRY, "S", 0)
ELSE
ERROR("Invalid value entered for variable SEX")
International library users should use GKM80 and GKF80 respectively instead of AM92 and AF92.
After entering THEN in this formula, if you select the Function Wizard using Shift F3 or by clicking the Insert Function
button on the Formula Editing section of the Design ribbon, the following dialog is displayed:
Select the Read function category and then READ_MORT_TABLE. Click Next and then enter the arguments
required for the function.
When you have done this, click Finish and the function will be entered into the formula. Then continue entering the
formula. Remember that F3 can be used to enter variable names into the formulas.
Click Ok to save the formula and return to Diagram view.
This formula does not reference the Q_EXP_MALE and Q_EXP_FEMALE variables so they are not required in the
product. Because you keyed the first suggested approach before switching to the second method, the variables will
still be included in the product.
NOTE: You can switch back and forth between Diagram view and the original list of variables using the Details /
Diagram / List icons on the ribbon. This can be useful because you can then use the outline to help you select the
variable you want to look at. Prophet remembers which variable is selected when you move between the views in
this way.
When you do this you will see that the list of variables now includes the core variables as well as the input
variables. However, you cannot edit the core variables from either of the views. This can only be done from within
the library.
Switch to Details view. You will notice that Q_EXP_MALE and Q_EXP_FEMALE are still in the list. From the Object
ribbon click Re-Scan to remove them from the product.
This completes the changes to the mortality experience.
Valuation series
You have set up the variable VALN_SERIES in the library with a default definition of model point. You will now
amend the product so that if this variable takes the value 0, the policy forms part of the old series, and if it takes the
value 1 it will form part of the new series.
To do this, you need to change the variable VAL_INT_PC. Open it by double-clicking or by clicking Open. Select
Change Definition Type followed by Formula. The following formula needs to be entered:
IF VALN_SERIES = 0 THEN
2.75
ELSE IF VALN_SERIES = 1 THEN
3.0
ELSE
ERROR("Invalid value entered for variable VALN_SERIES")
Then click Ok to accept this.
VALN_SERIES is now shown as being used by VAL_INT_PC in Diagram view. It has been brought into the product
as a result of your referencing it in VAL_INT_PC. You chose to give it a model point default definition in the library
so accept this definition by opening the variable and clicking Ok. You will then be returned to Diagram view.
Generic table definition for the initial commission rate

The scale used for initial commission rates at the moment is fairly simple, and can easily be entered as a formula. In
practice, however, the scale will usually be more complicated and so you are now going to replace the formula by a
generic table. Generic tables are in a format which can be used for many different purposes.
Changes need to be made to the variable IC_RATE_PC so go to the variable in the list and Open. The definition
type of the variable needs to be amended, so select Change Definition Type, followed by Generic Table and OK.
You are presented with the Generic Table Definition screen which appears as follows:
Enter the options as follows:
Table/Variable Name
This is the name of the table which Prophet uses when finding the required values for the variable. You can select
whether to specify the table name directly or read it from another variable. Since we only need to use one table,
leave Table Name selected. The table has not been created yet, but you will call it INIT_COM, so enter INIT_COM.
Time Allocation
You can choose either Monthly or Annually. Select Annually so that the table is only accessed once a year. In fact it
will only be accessed once for each model point because the value for this variable does not vary with time.
Prophet allows for this automatically.
Treat Missing Value as Error

Accept the default so that if a value is missing from the table Prophet treats that as an error rather than using a value
of zero.
Index Variables
Index Variable 1
This variable defines what the initial commission rate depends on. It should be set to POL_TERM_Y.
You can either type in the name or use either the drop down list box or the Insert Variable button to select the name
from a list. The main differences between the two lists are:
1. The drop down list box includes special names such as VAR_NAME and PROD_NAME which can only be
used as index variables. These aren't included in the Insert Variable list because they are not true variables.
2. The Insert Variable list shows the descriptions for each variable whereas the drop down list box only shows the
names.
Index Variable 2
Set this to VAR_NAME. Prophet will then use the values in the column headed IC_RATE_PC in the generic table
because this is the name of the current variable.
The Generic Table Definition should now appear as follows:

Click Ok to accept the definition for this variable.
As an alternative to defining the variable IC_RATE_PC as a generic table, you could have used the READ_
GENERIC_TABLE function. If you had done this, you would have used the following formula:
READ_GENERIC_TABLE("INIT_COM","Y",POL_TERM_Y,"VAR_NAME")
where the terms inside the brackets correspond to the entries "Table Name", "Treat Missing Value as Error", "1st
Index Variable" and "2nd Index Variable". The first two arguments are text strings and require double quotes. VAR_
NAME also needs to be in double quotes because it is not the name of an actual variable.
If for the Index Variable arguments you wish to use the values calculated for particular variables rather than the
names themselves they should not be entered in double quotes.
For more information about the use of Prophet’s READ functions, refer to the Help within Prophet.
Creating the generic table
You are now going to set up the generic table INIT_COM.FAC.

Right click on the IC_RATE_PC variable listed in the variables for the tutorial product and choose Open Table.
Then choose INIT_COM.FAC. The following dialog appears:
Create the table by clicking OK. The New Table dialog then appears.
In the New Table dialog choose Generic as the table to be created and enter its name in the Table Name text box
as INIT_COM.FAC.
Click OK to create the table. The Properties dialog for the new table appears.
In the Properties dialog for the generic table enter the description Tutorial Initial Commission Rates.
Enter the following values:
Index Variables - Enter a value of 2
Data Rows – Enter a value of 26
Data Columns – Enter a value of 1
Accept Table Format for the Layout. The dialog should now appear as:
Click on OK to create the empty generic table; you will be presented with an empty table of the required size.
Entering data into the empty generic table

You now enter data into the empty generic table that has been created. Note that if required, you can adjust the
width of a column by dragging its right hand edge in the header area and update the contents of the table by
pressing F9.
Do the following:
Enter POL_TERM_Y as the header of the first column.
Enter IC_RATE_PC as the header of the second column.
The following table of commission rates as set out at the start of Lesson 1 covers policy terms of between 5 and 30
years:
Policy Term in Years Initial Commission %

5 10
10 25
15 35
20 - 30 40
In the first column, enter all the possible values. You have to enter the required terms in years (5 through to 30).
In the second column, enter the commission rates that correspond to each premium paying term, interpolating
where necessary.
The table should now appear as follows:
Save the table by clicking Save. The save dialog for the table is displayed:
Enter the details shown to save the table as C:\Prophet_Tutorial\TABLES\INIT_COM.FAC and click OK.
Finally, in the Table Editor, click Close Table to close this new table. Save the product, selecting the option to delete
the existing results files as you are not going to use them again.
Scenarios that show the effects of product changes

In this section you will see how the effects of the changes you have just made can be checked.
The effect of making the mortality rates sex dependent

To demonstrate this, you should create a new model point file based on the existing one.
From the product and accumulation tree: expand the product, then expand the Model Point Files, then double click
on C_ENDT.rpt. Then use the Add Variables button in the Update section of the Table ribbon. Click OK to accept
the default settings for the dialog which appears. You can see the variable VALN_SERIES has been added to the
model point file. Create a second model point by right clicking and selecting Add Row. Then copy the values for the
first model point to the second model point and change the values that are different so that the model points have
the following values:
Variable Model Point 1 Model Point 2

SPCODE 1 2
AGE_AT_ENTRY 30 30
SEX 0 1
POL_TERM_Y 10 10
ANNUAL_PREM 170 160
PREM_PAYBL_M 120 120
PREM_FREQ 1 1
SUM_ASSURED 2000 2000
DURATIONIF_M 79 79
INIT_POLS_IF 1 1
VALN_SERIES 0 0
The first model point represents a policy for a male, and the second represents a policy for a female. Note that the
lower annual premium for females reflects the lower expected mortality rates.
From the Save Table button select Save Table As to change the name to C_ENDT.002 (or I_ENDT.002) and click
OK.
The effect of the valuation series

To demonstrate this, you should add another model point to C_ENDT.002. To add an additional row, right click and
then choose the Add Row option. Then enter the following details:
Variable Model Point 3

SPCODE 3
AGE_AT_ENTRY 30
SEX 0
POL_TERM_Y 10
ANNUAL_PREM 170
PREM_PAYBL_M 120
PREM_FREQ 1
SUM_ASSURED 2000
DURATIONIF_M 79
INIT_POLS_IF 1
VALN_SERIES 1
Once you have saved and closed this new model point file, the product is ready to be re-run by clicking on the Run
button.
We have deliberately omitted a stage in this process in order to create an error in the run. Can you identify it now?
Identifying an error in the run

If you look in the Run Monitor you should see that the run pair failed. Click on Run Log to open Results Viewer and
click on the View button for that run. If you double-click on Definition in the tree on the left you should see that the
error is in the Execution stage of the run. If you then double-click on Execution in the tree, you should see the error
message:
ERROR PMP008 Variable VALN_SERIES missing from model point file.
This message indicates that a variable is missing from the model point file that is being read. This has occurred
because the model point file extension in the Tables tab in the Tutorial run setting was not changed from .RPT to
.002 before the product was run.
It is good practice to look at the run log every time a product is run. However, if you had gone straight to Results, the
product C_ENDT would not have been available for selection, as there are no results to report on.
Close Results Viewer. To change the model point file extension, open the Tutorial run setting and amend the File
Extension for Model Point Files to 002 on the Tables tab. You should now re-run the product and look at the results.
You can see the effect of the changes that were made by looking the results for sub-product codes 1, 2 and 3.
127
L E S S O N 6
Further topics
In this lesson you will learn about some further aspects of Prophet, which should help in your general
understanding and use of the system.
Regeneration of products 128
Conclusion 130
128 Lesson 6 Further topics
Regeneration of products
The Prophet regeneration option forces code for one or more products to be regenerated when they are next
included in the calculation run.
Regeneration should be used in the following cases:
l If changes made in the library only affect core variables then those changes will only be reflected in the
products when they are next regenerated. Using the Regenerate option means that you do not have to re-scan
each of the products concerned. However, you will still need to do this if any of the library changes affect input
variables.
l If libraries and products are copied between PCs but not the compiled product executable files.
l If a new release of Prophet is installed which requires the code to be regenerated to enable new features.
To regenerate one or more products, multi select from the tree and select regenerate from the run section of the
Home ribbon.
The following confirmation dialog is then displayed:

Re-scanning of products (Auto-Scan)

This option allows you to automatically re-scan products without having to select each one individually. It has the
same effect as opening each product in turn, clicking Re-Scan and saving the product. There are two main reasons
why you might want to use the Auto-Scan option:
l To bring a new input variable into the products, where the default definition is the required one for each
product.
l To remove an input variable from products if it is no longer required.
If you select Auto-Scan in the Product section of the Object menu, the following dialog is displayed:
130 Lesson 6 Further topics
Conclusion
You have now completed the "Introduction to Prophet Tutorial" and should be ready to tackle some real tasks using
Prophet.
l To learn more about Prophet:
l Work through the Model Office Tutorial

This tutorial introduces you to a number of other features which include:
l New business processing
l Accumulations
l Summary library
l Prophet Excel Reporting
l Grouping of model point data in Prophet
l Work through the tutorial in the Data Conversion System and Viewer User's Guide.
l Consult the manuals supplied with Prophet

These manuals are supplied on paper and can also be accessed from within Prophet by selecting User
Manuals on the Support Ribbon.
l Use Help. You can see this by selecting Help Topics on the Support Ribbon, or you can see context sensitive
help by pressing the F1 key. Help contains information for all the system features of Prophet.
l Refer to Actuarial Documentation, this supplies detailed information on Prophet Libraries, indicators and
variables. It is accessed by selecting Global Actuarial Documentation in the Support Ribbon. Context sensitive
Actuarial Documentation can be shown by opening the Context Actuarial Documentation pane at the bottom of
the screen.
l Experiment with the system and the calculations you can set up.
131
Conventional product input files & results
This section contains the product listing and results printouts for the C_ENDT product to help you understand and
identify any mistakes that may have been made.
132 Lesson 7 Conventional product input files & results
Product listing
This listing in this section is the final version of the I_ENDT product after any changes in the tutorial. It can be
produced by selecting the product from the list and doing the following:
l Click Prophet button and from the Prophet menu choose Print to display the Print Products dialog:
l In the Print Products dialog:
l Choose Selected Product(s)
l Select Indicators, Input Variables and choose Code Order
l Click OK to print the list of products.

Product listing 133
Product listing 135
Product listing 137
Product listing 139
Product listing 141
Model point files

Parameter file
Global file 145
Global file
Results
Results 147
Results 149
151
International product input files & results
This section contains the product listing and results printouts for the I_ENDT product to help you understand and
identify any mistakes that may have been made.
152 Lesson 8 International product input files & results
Product listing
This listing in this section is the final version of the I_ENDT product after any changes in the tutorial. It can be
produced by selecting the product from the list and doing the following:
l Click Prophet button and from the Prophet menu choose Print to display the Print Products dialog:
l In the Print Products dialog:
l Choose Selected Product(s)
l Select Indicators, Input Variables and choose Code Order
l Click OK to print the list of products.

Product listing 153
Product listing 155
Product listing 157
Product listing 159
Product listing 161
Model point files

Parameter file 163
Parameter file
Global file
Results 165
Results
Results 167
Results 169

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iWorks Prophet

INTRODUCTION TO PROPHET TUTORIAL

SunGard iWorks Prophet

Welcome to SunGard iWorks Prophet Professional 1

Setting up a simple product 5

Setting up model point files and tables 61

Setting up, running and reporting on a product 77

Reporting on dependencies in Diagram View 97

Updating libraries and products 105

Further topics 127

Conventional product input files & results 131

International product input files & results 151

Welcome to SunGard iWorks Prophet Professional

l Asset liability modelling

l Stochastic modelling and

About this tutorial

l View the generated results of the product calculations

l Use Diagram View to analyse and update the product

In particular, to get the most out of this tutorial it is assumed that:

l You have an understanding of actuarial concepts.

How this tutorial is organised

The tutorial is divided into the following lessons:

l Setting up a simple product

l Setting up test model point files and tables

l Setting up, running and reporting on a product

l Reporting on dependencies in Diagram view

l Maintaining an actuarial library and updating the product

l Conventional and International reference sections

Setting up a simple product

TOPICS IN THIS LESSON

Tutorial product details 7

Starting the tutorial 11

A Tour of Prophet Professional 8 14

The product design process 16

Tables used by products 17

Creating the product 18

Selecting the indicators 20

Specifying the input variables 26

Products and actuarial libraries

Variables and indicators

Tutorial product details

l Future Investment Earnings

Policy Term in Years Initial Commission %

For the International product profits are taxed at 33%.

Years in Force Lapse Rate (%)

Future Investment Earnings

Starting the tutorial

Starting Prophet and creating a new workspace

l The Prophet start page is then displayed.

Creating a new Prophet workspace

To create the new Prophet workspace:

l The dialog below will open

l Enter a suitable description, for example "Introduction to Prophet Tutorial Workspace".

l Select the Install Libraries Only option.

A Tour of Prophet Professional 8

The Tree and Accordion

The Prophet Button and Quick Access Toolbar

The Main Window

The Level Tabs

The product design process

l Creating data files used by the product.

l Displaying and analysing the results of the calculation run.

Tables used by products