Actuarial modelling plays a crucial role in supporting decision-making in insurance and reinsurance companies. These models perform key functions such as pricing, reserving, capital projections management and asset-liability modelling (“ALM”).
Moody’s AXIS (“AXIS”) is a commonly used actuarial modelling software in the insurance industry that can be used for multiple actuarial functions such as pricing, reserving, ALM, hedging, capital calculations and financial modelling. The object-orientated approach creates an environment, not only for model development but also for model risk management. By utilising the Enterprise Link features, AXIS can provide support in implementing a company’s model governance and control policies. The separation of the design, test and production environments, ability to define user roles and having effective version control are possible using Enterprise Link features.
This article provides an introduction to the design of the software and the functionalities that can be used in a valuation or reserving environment. We begin by explaining the process of establishing a reserving model in AXIS, guiding you through various steps including data handling, validation and adjustment, assumption input, and the generation of cashflow projections. We also touch briefly on the control and governance features of Enterprise Link.
The article aims to provide an overview of the software without delving deep into the technical aspects. We provide valuable tips throughout the article that can be easily implemented.