Sunday, 13 March 2016

Cost of insuring the world’s population - only $190 trillion

Global population life insurance calculation takes less than 2 hours.
DUBAI, Sunday 13 March 2016 – The cost of insuring the world’s population has been calculated at approximately $190 trillion, or roughly 2.5 times world GDP*, according to a calculation by Willis Towers Watson. The calculation, run on the Microsoft Azure cloud platform, involved an analysis of the insurance cost of providing each of the world’s 7.3 billion people with a $100,000 whole-of-life insurance policy and took under 2 hours.
Stephen Hollands, Saas & vGrid Global Product Leader at Willis Towers Watson, said: “This was a fascinating exercise to test cloud computing and software technology to the limit and push the calculation boundaries for insurers. It demonstrates how industrialised risk modelling has become and how much processing power, speed and accuracy insurers have at their fingertips to price their products and manage risk and capital.”
Willis Towers Watson, using Microsoft Azure Batch cloud service, ran the specialised insurance calculation with over 100,000 processing cores in approximately 90 minutes. According to the company, the calculation would have taken 19 years on a standalone computer with a single core. The entire exercise - including a one-off setup and configuration of the customised grid and model, in addition to running the model several times – took less than 24 hours and used data centres around the world including in Japan, India, Europe, Brazil and Australia.
Jonathan Silverman, Insurance Industry Solutions Director at Microsoft Corp., said: “What question is bigger for a life insurance company than figuring out the cost of insuring the entire world's population? Answering this complex question, in less than 24 hours, is a genuine technological triumph. In addition, the use of just a single programming interface on Microsoft Azure to do it, regardless of the number of cores involved, shows how easy it has become to achieve a level of scalability that was until now only possible through complex coding and intense management input.”
The calculation used RiskAgility FM, Willis Towers Watson’s latest financial modelling tool, which is designed to run complex financial models and hyperscale-sized jobs for life insurers. It also used its new vGrid product, an infrastructure-as-a-service software tool, that allows life insurers to run their models via an on-demand, cloud-based technology grid.